Deal values in the insurance broking sector have risen by more than 25% over the past year
New analysis of deal values in the insurance broking sector shows that earning multiples have risen by more than 25% over the past year.
According to Deloitte, multiples in excess of 10 times have been achieved in many insurance M&A deals over the past year. Deloitte argues that demand is a key factor pushing up prices. Whilst much of the insurance broking sector M&A activity was previously driven by broker consolidation, 2006 and the start of 2007 have seen insurers re-enter the market for insurance distribution.
Ian Clark, insurance partner at Deloitte said: “The interest of insurers in acquiring distribution channels has not only increased demand but has fundamentally changed the way in which insurance distributors are valued. Insurers are increasing the multiples offered by paying upfront a share of estimated future underwriting profits.”
Deloitte predict that insurance broking deals will continue to accelerate and argue that double digit multiples are here to stay.
