The year 2024 saw sustained momentum in M&A activity within the UK insurance distribution market, according to preliminary data from MarshBerry.
Ahead of the publication of its annual 2024 Insurance Distribution Market Report – UK, the firm reports that deal volumes closely mirrored those of 2023, setting a new record for announced transactions.
However, the raw deal count only scratches the surface, as an analysis reveals trends in buyer and seller behaviour, the nature of acquired businesses and deal sizes. These factors highlight a mature domestic consolidation environment and an increasingly international M&A landscape with cross-border activity on the rise.
M&A activity in 2024 recorded 152 deals, slightly exceeding the 151 deals announced in 2023. This made 2024 the most active year in the sector’s history, according to the report. While the total is consistent with the high levels of activity seen in 2023 and 2021, it significantly surpasses the long-term average.
The month of December accounted for 10 newly announced transactions, all of which were smaller-scale deals. The final quarter of the year recorded 41 deals, making it the second most active quarter on record. This was likely influenced by changes to Capital Gains Tax in October’s budget, which prompted vendors to accelerate transactions.
Smaller transactions dominated the year, particularly in commercial broking. According to MarshBerry, the average size of targets continued to decline, with a focus on sub-£5 million transactions. These smaller acquisitions, often involving unadvised and cost-effective targets, reflect a strategy aimed at achieving high volumes rather than individual high-value deals.
International consolidation also played a significant role in 2024. The most notable transaction in December was Arthur J. Gallagher’s acquisition of AssuredPartners, a top 50 UK broker with more than £100 million in brokerage and approximately 850 UK staff. AssuredPartners has completed over a dozen acquisitions in recent years, making this deal a significant market development, MarshBerry said. This follows similar cross-border activity earlier in the year, including Aon’s acquisition of NFP. Such transactions have implications for UK market dynamics, by potentially reducing the number of domestic buyers for medium to large targets.
Another key trend in 2024 was a marked increase in deals involving personal lines businesses.
Nearly 20% of transactions targeted this segment, and five of the six private equity acquisitions in 2024 focused on personal lines. Historically less attractive due to challenges such as lower renewal retention and competition from price comparison websites, personal lines have seen renewed interest. Buyers appear to be drawn by opportunities for digital growth and competitive positioning in this space.