Market Temperature: Tepid

The number of deals each month has gone up and down more times than riding an elevator with a six-year-old pushing the buttons. October was one of the slowest months this year with just 19 deals, down from September (29), which was up from August (18), which was down from July (27). 

You get the point. Despite the fluctuations, with 236 deals through October, activity is up 26% for the year.

With gains in all buyer categories but “other,” there was little change in the overall buyer landscape. Insurance brokerages had 191 deals or 81% of the volume, followed by banks with 11% and the remaining buyer categories with 8%.

The top 10 brokerages accounted for more than half of all the brokerage deals announced this year.

Continuing to lead the count this month, and year, is Hub International. With three deals in October, Hub raised its 2011 count to 25. Following the leader is Arthur J. Gallagher (AJG) with three deals and a full-year count of 19. AJG is the only buyer this year to announce at least one deal in each month. Rounding out the top three is Brown & Brown with 14.

Ascension acquired Texas-based Fred Lewis Agency, expanding its market share in the recreational and sports markets.  The acquisition marks Ascension’s fourth deal this year. Holmes Murphy made its second acquisition this year with Bridge Insurance Partners, a Texas-based property-casualty firm focused on growing, mid-market companies. Confie Seguros acquired the Florida operations of Trustway Insurance Agencies. The acquisition serves as a platform for further expansion in the state.

Unlike past years, every month this year has witnessed at least one bank deal, and October was no exception.  Continuing its expansion into Eastern North Carolina, TowneBank acquired Stanton Taylor Agency. The deal marks the second for the bank this year, putting it in a three-way tie for the second spot on the bank scoreboard. Entering the insurance business for the first time, New Hampshire Thrift Bancshares acquired McCrillis & Eldredge. The full-service agency will enable the bank to provide a full range of financial products to its customers. Banks have announced 27 deals this year, matching the deal count through October for the past two years—combined!

There were three more third-party administrator (TPA) deals this month, bringing the total to 12. Wells Fargo sold off its medical TPA business to HealthSmart Holdings, creating the second-largest non-carrier owned TPA in the U.S. The management of Trusted Plans Service Corp. acquired the Washington-based firm from PacificSource Health Plans.

IAS Claim Services expanded its footprint with the acquisition of California-based JBA Insurance Adjusters.

While the fourth quarter is off to a comparatively slow start, the deal elevator is likely on its way back up. With just two months to go, we just might get off at the top floor at the end of the year.