There is never much of a seasonal lull in the world of insurance industry reporting, but the last few weeks of 2021 have been notable for activity in the MGA and programs space around M&A which has only served to highlight the strong demand for assets in the sector.

Handshake – M and A

In the December issue of Program Manager we lead on news that White Mountains-owned NSM Insurance Group – one of the larger MGA platforms that is not part of a bigger intermediary – has been attracting heightened buyer interest in a market where scarcity value is great.

The firm is ostensibly not for sale and is understood to have communicated that position consistently in recent years. But as an acquisitive mature platform itself that is thought to write more than $1.2bn in premium it is understood to be attracting interest from the growing number of buyers targeting the segment.

Details of parties that have made unsolicited overtures to the business are not known.

But a look down the headlines in this month’s issue demonstrates the continued appetite both from private equity and consolidator platforms for MGA acquisitions.

In our recent The Insurer TV Leading Voices interview with Ryan Specialty’s Pat Ryan, the veteran said the MGU space is ripe for further consolidation.

In our Program Manager interview with rebooted specialty platform Ambac, we report that an MGA acquisition strategy is a key part of the group’s plans alongside its program fronting carrier play Everspan.

And in news developments in the last couple of weeks, Acrisure has emerged as a major player in MGA M&A with an announced deal to buy SUNZ entities as well as its pending acquisition of Appalachian Underwriters.

The move is part of a strategy to build out an underwriting platform using the technology it has been integrating group-wide to underwrite and transfer business aggregated from its agencies to (re)insurance capacity providers.

As it unveiled the SUNZ acquisition, Acrisure said the deal would be followed by a number of other related and complementary additions to the platform which are expected to cover a broader range of business lines and insurance segments.

That means Acrisure can be added to an already crowded MGA acquirer space that includes the growing underwriting platforms of the big three wholesalers Amwins, Ryan Specialty and CRC along with the likes of Gallagher’s Risk Placement Services and One80 Intermediaries, and retailers such as Hub with its Specialty Programs Group, Marsh with its Victor platform, and Brown & Brown’s National Programs division.

There are also plenty of other hungry players too, including Dual bolstered by its Align Financial acquisition and looking for further growth, and Applied Underwriters aggressively growing organically and through M&A.

Then there is private equity. In this issue we report on the sale of a majority stake in cat-focused MGA Velocity to Oaktree Capital, the proposed launch of Montague Risk Partners, new growth capital for Vale from Flexpoint Ford that will help fuel M&A and the launch of MGA MX Underwriting by HGGC-backed SRG.

Add in the growing number of start-up MGA platforms looking to grow by adding underwriting teams and bolt on acquisitions and 2022 promises to be a hotbed of activity again in the segment for assets and talent.

With growing demand and finite supply, that suggests there will be no let-up in the record multiples that MGAs have been attracting in the last couple of years.

It also means that the draw will remain strong for entrepreneurial underwriters to build MGAs and programs that can be the next in the shop window as long as the buying frenzy continues.