In Partnership with
2025 mortgage market poised for growth
Experts discuss strategies to navigate a stabilizing mortgage market, highlighting trust-building, borrower education, and niche opportunities as key drivers for brokers looking to grow in 2025
Eddy Perez
EPM
Industry experts
Stephen Ballard
RCN Capital
Marc Tatarcuk
PCV Murcor
Tyler Bohn
Deephaven Mortgage
Eddy Perez, CMB, isfounder and CEO of EPM, based in Atlanta, Georgia, where he oversees compliance, and technology. As co-founder of EPM, recognized as part of the Inc. 5000, he has excelled within the mortgage industry, being named one of the nation’s top mortgage bankers, recognized in National Mortgage Professionals Magazine’s “40 Most Influential Mortgage Professionals under 40.”
EPM
Eddy Perez
Stephen Ballard, senior partnerships manager, specializes in building and maintaining customer relationships, and educating potential clients on RCN Capital’s diverse product line. Joining the company in the summer of 2017, Stephen’s mission is to expand RCN’s saturation in local and national markets. His previous experience has been in education and customer relations, which is used extensively at RCN Capital. Stephen graduated from the University of Connecticut Business School with a degree in finance.
RCN Capital
Stephen Ballard
Marc Tatarcuk is the vice president of national sales for PCV Murcor, a nationwide real estate valuations management company.
Tatarcuk, with over 20 years in the real estate and financial services industries, is responsible for overseeing and guiding the company’s national sales efforts across all market verticals.
He has a wealth of sales experience in the areas of appraisal management, mortgage finance, portfolio management, and technology. On the lending side of real estate, Tatarcuk has held leadership positions with Catholic Vantage Financial, First National Bank of America, and Hartland Financial.
Tatarcuk is based out of Howell, Michigan near Detroit.
PCV Murcor
Marc Tatarcuk
Tyler Bohn is the managing director of national accounts with Deephaven Mortgage. He is a proven sales executive with demonstrated success in contributing to bottom-line impact through rapid revenue acceleration. He has more than a decade in leadership roles, leading several successful multi-channel and cross functional teams. His career background includes serving as senior vice president and national sales director at Solidifi as well as leadership roles at Incenter, First American Mortgage Solutions and Option One Mortgage. He holds a B.A. in communications from the University of California in San Diego.
Deephaven Mortgage
Tyler Bohn
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Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Vault Plus Mortgage and Finance Consultancy
David Merison
“The noise had been growing for a couple of years, but now there’s more of an acceptance. A lot of people are hopeful for 2025/26”
Eddy Perez, EPM
AS 2024 approaches its end, there’s no shortage of excitement in the US mortgage industry. After a period of turbulence, 2024 marked something of a cool-off year – however, brokers have still had to navigate economic fluctuations, changing borrower needs, and shifting strategies among clients and lenders.
At a recent roundtable, four key experts shared their insights into the challenges, opportunities, and strategies shaping the mortgage landscape in 2024 and beyond. Their perspectives shed light on a stabilizing market, the role of education and technology, and the path to growth in 2025.
“[In 2021–22], you could make as many projections as you liked, and you’d be lucky if one out of five came true. Through 2024, we started to experience a calming”
Marc Tatarcuk, PCV Murcor
There is always room for the exceptional. If you are phenomenal at what you do, you’ll have no issue growing your share in the market”
Stephen BallarD,
RCN Capital
As the market has steadied, brokers and lenders have adapted their strategies to meet new demands. Education, modernization, and specialization emerged as recurring themes during the discussion.
Ballard emphasized how important it is to address fear and uncertainty in the market, particularly for those newer to the industry. In an attempt to address this, his firm developed an investor sentiment survey to gauge market confidence and provide data-driven insights.
“Almost all of the people we’ve talked to who have been in the industry for a long time have seen this before,” he said.
“We still see inventory and affordability issues – however, there are many credit-worthy borrowers out there looking for alternative products, and there’s tremendous opportunity for growth”
Tyler BohN,
Deephaven Mortgae
Looking ahead, the panelists shared their predictions for 2025 and outlined the opportunities they see for brokers and lenders.
Ballard introduced the concept of a “trust recession,” a phenomenon he expects will dominate the next year. Many clients, he explained, remain deeply skeptical about the housing market and broader economy, drawing comparisons to the 2008 financial crisis.
“Your clients do not trust anything that’s happening with real estate right now, so you have to show them why today’s market is not like 2008,” he said. Brokers who invest in transparency,
everyone up for failure.” By engaging early and developing strategies tailored to complex borrower needs, brokers can drive better outcomes for their clients.
Perez anticipates that 2025 will bring increased transaction volume as homeowners tap into record-high equity levels. He stressed the importance of authenticity and intentionality in the way brokers engage with clients. “You have to show that you’re the expert, and that you understand the what, why, how, and who,” he said. To that end, his firm plans to triple its investment in content creation training, enabling brokers to build their expertise and communicate effectively with their target audiences.
Ultimately, the road to growth is paved with education, trust, and proactive engagement. Brokers who take the time to understand their clients’ needs, embrace new technologies, and develop targeted strategies will be well-positioned to succeed in 2025 and beyond. As Ballard notes, “There is always room for the exceptional. If you are phenomenal at
The panelists largely agreed that 2024 has been a year of stabilization, following the turbulence of 2021 and 2022. Commenting on this difficult period, Marc Tatarcuk, vice president of national sales at PCV Murcor, noted, “You could make as many projections as you liked, and you’d be lucky if one out of five came true. Through 2024, we started to experience a calming and an adjustment period, and more conversations on what the future looks like.”
Eddy Perez, founder and CEO at EPM described it as a “changing of the guard” year, where industry attrition opened the door for new talent to step into leadership roles.
“The noise had been growing for a couple of years, but now there’s more of an acceptance,” Perez said. "The discussions around interest rates and low inventory have melted down to a level that’s acceptable to most, and a lot of people are hopeful for 2025/26.”
Stephen Ballard, senior partnerships manager at RCN Capital, noted an interesting divide between homeowners and property investors: while homeowners have been hesitant to give up low fixed-rate mortgages, seasoned investors remain undeterred by higher rates.
education, and building trust with their clients will stand out in this challenging environment.
Tatarcuk sees 2025 as a year of incremental but steady growth. With the market hitting its stride, he expects to see more borrowers seeking guidance on navigating an increasingly diverse range of loan products. His firm’s priority will be ensuring brokers have access to these solutions while helping them identify what makes the most sense for each client.
“Even at rates like seven percent, if there’s cash flow, then they’re still okay,” Ballard said. He highlighted how experienced investors, familiar with past cycles, are looking to leverage cash flow and avoid high prepayment penalties in anticipation of rate drops in the coming years.
Tyler Bohn, managing director, national accounts at Deephaven echoed this optimism, noting that the real challenge isn’t a housing crash, but a transaction shortage.
"Homeowners across the country are sitting on equity that they can use to continue to leverage their wealth," he said. “I agree that 2023 was the official ‘bottom,’ and now the turbulence has gone. We still see inventory and affordability issues – however, there are many credit-worthy borrowers out there looking for alternative products, and there’s tremendous opportunity for growth.”
The consensus was clear: while inventory and affordability remain significant challenges, brokers and lenders who adapt to market conditions and focus on niche opportunities will be positioned for success.
“When rates go from high-twos and low-threes to six or seven percent, the people who purchase the low inventory tend to be investors. This means we haven’t seen too much of a drop. One of our main approaches has been to try to wrangle some of the fear, and that’s been an educational approach.”
Tatarcuk pointed to modernization as a cornerstone of his firm’s approach. Significant investments in infrastructure and technology have positioned his company to better serve brokers and lenders, which has ensured smooth integration and a stronger overall experience.
“Whenever the brokers or lenders need us, we need to be sure that we’re in a strong position to work with them and plug directly into their system,” he explained. These advancements, he added, have already started to pay off and will no doubt continue to do so into 2025 and beyond.
Read on
Bohn is particularly confident in the self-employed borrower segment, which he estimates comprises half of all non-QM business. He also sees significant growth potential in the residential real estate investment market and the equity market. By proactively developing solutions for these segments, Bohn says that brokers can position themselves as indispensable partners to their clients.
RCN Capital is a national, direct, private lender that provides commercial loans for the purchase or refinance of non-owner-occupied single-family & multi-family properties. RCN specializes in ground-up construction financing, short-term bridge loans, fix & flip financing, and long-term rental financing for real estate investors. RCN lends to both new and experienced real estate professionals throughout the country.
Find out more
Licensed in all 50 states, plus D.C., PCV Murcor provides nationwide appraisal management and valuation advisory services for residential and commercial real estate. An industry leader with over 40 years of experience managing valuation needs for mortgage lenders and servicers, financial institutions, investors, federal agencies, and the GSEs. Our mission is to help clients and their customers make their real estate needs happen through accountability, connectivity, and performance. Our use of state-of-the-art AI technology ensures precision and efficiency in every aspect of our service. Experience innovation-powered precision and time-tested excellence with unparalleled service and cutting-edge products.
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Deephaven Mortgage is a pioneer and leader in non-QM since 2012. Their longevity and strength in the non-QM space has allowed a significant number of borrowers to achieve homeownership who otherwise would not have under traditional requirements. Deephaven offers a wide array of non-QM loan products that includes LLC business purpose lending, DSCR cash flow, Expanded-Prime, Equity Advantage Closed End Second, Non-QM HELOC, and Non-Prime solutions for borrowers. As experts and educators in the Non-QM sector, Deephaven offers extensive training to all of their mortgage partners. Discover the Deephaven Difference and increase your volume and referral base.
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“At a macro level, the fundamental forces that have driven consolidation across the insurance distribution landscape remain as prevalent today as ever”
Trevor Baldwin,
Baldwin Risk Partners
“More specialized, consultative brokers are going to have more new business opportunities than the average firm that’s doing business like they were 30 years ago”
Gerard Vecchio,
MarshBerry
“Sellers no longer view a robust technology offering as a nice-tohave item; if a buyer isn’t bringing technology enhancements as a value proposition to the table, they are going to lose out on more transactions than they win”
Timothy J. Hall,
Relation Insurance
“Traditionally, financial services have not been the first investment area for most private equity funds, but today, insurance is an attractive industry because it has been stress-tested”
Phil Trem,
MarshBerry
In Partnership with
M&A
Insights 2021
Insurance Business America uncovers the answers to brokers’ biggest questions about mergers and
acquisitions, with expert insight from MarshBerry, Baldwin Risk Partners and Relation Insurance
Read on
Trevor Baldwin
Baldwin Risk Partners
Phil Trem
MarshBerry
Timothy J. Hall
Relation Insurance
Gerard Vecchio
MarshBerry
Industry experts
RESILIENT. It’s a term often used to describe the insurance distribution market, which continues to attract the hungry eyes of the investment community. Despite the COVID-19 pandemic and its socioeconomic challenges, the insurance distribution sector has remained resilient. As such, it’s no surprise that merger and acquisition activity in insurance distribution soared to record heights in 2020.
Deal activity got off to a roaring start last year. Buzzing with energy after a record year of transactions in 2019, well-capitalized acquirers (both private-equity-backed and public companies) continued to build on that momentum and snap up insurance distribution firms. Many of the deals completed in January and February were negotiated and agreed to back in 2019, before the coronavirus pandemic brought the world to a halt.
attractive from an investment perspective.
According to MarshBerry, the US saw a record deal count of 705 announced transactions in 2020, up from 648 in 2019. In addition, 57 firms made two or more acquisitions in 2020, compared to 49 in 2019. However, the total number of firms making acquisitions was higher in 2019 (202 versus 169 in 2020).
What does all of this mean? According to Phil Trem, president of MarshBerry’s Financial Advisory division, “it likely shows fewer independent firms are buying due to continuing COVID-19 concerns. Those that were in acquisition mode leaned into the accommodating conditions of the marketplace. Fewer firms tried their hand at acquiring, while established buyers took full advantage of a hyperactive market.”
“Many buyers returned to the market over the course of 2020,” says Trevor Baldwin, CEO of Baldwin Risk Partners, “and we even saw new entrants as agency performance again proved resilient amid times of economic stress, reiterating the quality and durability of the industry as a whole.”
Indeed, the factors driving consolidation in the insurance distribution landscape remained as prevalent in the COVID-19 era as before. For sellers, core motives included a quest for scale and additional resources (especially technology), lack of internal perpetuation, and a desire to capitalize on record-high valuations. Buyers, on the other hand, are interested in agencies and brokerages for their resilience, which has been proven through tough economic times like the Great Recession and the current pandemic. Insurance distributors have been able to produce predictable and consistent revenue streams coupled with high margins, making them
Deal valuations also reached all-time highs in 2020, exceeding the records set at the end of 2019. “In the fourth quarter of 2020, valuations on top-rated platforms were approximately 10% higher than in the first quarter,” Trem says. “So, valuations realized during the pandemic, on average, were higher than they were pre-pandemic, which is not a trend we expected. Because of the resiliency of the insurance industry ... existing buyers renewed their acquisition appetite, while new entrants, impressed with this resiliency, added to an imbalance of buyer appetite. With more buyers in the space and heightened demand, valuations were inevitably driven higher.”
It’s unclear how long this valuation trend will last, given the potential for capital gains tax hikes under the Biden administration, but at the onset of 2021, deal activity in the US has kept pace with the frenzied finish of 2020. “While there remains uncertainty on when COVID-19 will ‘end,’ I believe that the insurance agency acquisition ecosystem has adapted to efficiently and effectively complete transactions in an alternative environment,” says Timothy Hall, EVP and head of mergers and acquisitions at Relation Insurance. “As indicated by the record number of transactions, deals still got done in 2020, and trends point to that continuing in 2021.”
One thing is certain: Investment interest in the insurance distribution market remains high, even in these unprecedented times. With that in mind, IBA spoke to several M&A experts about key themes that are likely to dominate insurance mergers and acquisitions in 2021, from economic conditions and digitization to succession planning and the role of private equity. IBA hopes their insights will provide readers with an enhanced understanding of the current state of the insurance distribution M&A market in the US.
What's the macro overview of US insurance industry M&A trends in 2020?
Gerard Vecchio: In 2020, specialty markets completed 123 unique transactions, equal to 17.5% of total announced transactions for the year. Historically, specialty lines have typically comprised 13% to 15% of total annual announced deals. MarshBerry believes that two factors driving the increased number of M&A transactions involving specialty wholesalers, MGAs and program administrators could be 1) an accelerating insurance rate environment prevalent among many property & casualty lines of business, and 2) the low cost of debt capital.
The acceleration of rate increases across a broad number of insurance coverages could situate sellers to be in a better position to meet or exceed future sale price incentives that may be tied to revenue or earnings growth, commonly known as earn-outs. There has been an acceleration of insurance rate increases across the business interruption, general liability, commercial auto, umbrella, commercial property and
professional liability/directors & officers liability lines of business. Furthermore, with the historically low cost of debt capital – one could argue that the real cost of debt capital is close to zero – buyers may be incentivized to pay premium valuations due to their ability to finance acquisitions at near zero borrowing costs.
Trevor Baldwin: At a macro level, the fundamental forces that have driven consolidation across the insurance distribution landscape remain as prevalent today as ever. Scale increasingly matters, tech enablement – and the ability to invest in tech capabilities – is increasingly enhancing the value brokers can deliver for their clients, and robust valuations have made it increasingly difficult for principals to economically perpetuate ownership internally.
Additionally, the onset of COVID-19 in early 2020 and the uncertainty that came with it, coupled with the threat of increasing capital gains tax rates under a new presidential administration, brought a wave of incremental private sellers to the table. While we saw a brief pause in activity from some of the more active acquirers in early 2020 due to the COVID-19 pandemic, activity picked up through the end of the year from both strategic and private equity players.
With the presidential election uncertainty behind us, we expect a continued focus on potential tax increases and availability of attractive debt financing to drive robust M&A activity and sustained valuations through 2021.
Timothy Hall: Twenty-twenty saw, and 2021 continues to see, a frenzied pace of M&A activity in insurance distribution. A couple of factors helped drive the highest level of closed transactions on record, despite COVID, including an increase in the number of wellcapitalized acquirers, both PE-backed and public companies; potential changes in the capital gains and corporate tax rates; and the general resiliency of the insurance distribution sector.
There are approximately 30 firms that are serial acquirers of insurance agencies. Most of these buyers are private equitybacked firms, while public companies like Gallagher, Brown & Brown, Baldwin Risk Partners and Marsh – via Marsh & McLennan Agency – are also extremely active. The pool of acquirers who have financial sponsors grew in 2020 as several new firms were formed.
Firms that are electing to sell or partner with an ‘aggregator’ firm range from true platforms with significant revenue – more than $20 million – to smaller ‘tuck-in’ agencies. Twenty-twenty saw an uptick in the number of top 100 broker acquisitions and a significant uptick in tuck-in activity among all players. Firms that
BRP is an award-winning entrepreneur led and inspired insurance distribution holding company delivering solutions that give our clients the peace of mind to pursue their purpose, passion and dreams. Our family of firms’ best-in-class resources and diverse portfolio of services are innovating the industry by taking a holistic and tailored approach to insurance, risk management and employee benefits.
Find out more
Founded in 1981, MarshBerry has grown to become the nation’s #1 M&A Advisory Firm and top growth consultant to insurance agents & brokers, specialty distributors, private equity firms, banks & credit unions and insurance carriers, through industry-specific services that include: Merger & Acquisition Advisory, Debt & Equity Capital Raising, Organic Growth Consulting, Market Intelligence and Connect–Peer Exchange Network.
Find out more
Relation Insurance Services, formerly Ascension Insurance, is a specialty insurance brokerage that offers superior risk-management and benefits-consulting services through our family of brands across the United States. More importantly, we’re a team of experienced professionals who genuinely care. Whether it’s for you, your family, or your business/organization, we want to be the relationship you trust for answers to your questions, solutions for your insurance needs, and peace of mind for your future.
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Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Mashberry
Gerard Vecchio
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tellus in penatibus condimentum malesuada ante vulputate nisi, arcu leo. Amet urna sapien purus vestibulum fermentum a. Cursus metus massa donec sed varius. Nunc enim sit morbi lacus, molestie et nunc. Nullam sed facilisi id malesuada. Ante purus velit, quam scelerisque ultrices scelerisque donec.
Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Relation Insurance
Timothy J. Hall
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tellus in penatibus condimentum malesuada ante vulputate nisi, arcu leo. Amet urna sapien purus vestibulum fermentum a. Cursus metus massa donec sed varius. Nunc enim sit morbi lacus, molestie et nunc. Nullam sed facilisi id malesuada. Ante purus velit, quam scelerisque ultrices scelerisque donec.
Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Mashberry
Phil Trem
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tellus in penatibus condimentum malesuada ante vulputate nisi, arcu leo. Amet urna sapien purus vestibulum fermentum a. Cursus metus massa donec sed varius. Nunc enim sit morbi lacus, molestie et nunc. Nullam sed facilisi id malesuada. Ante purus velit, quam scelerisque ultrices scelerisque donec.
Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Baldwin Risk Partner
Trevor Baldwin
“At a macro level, the fundamental forces that have driven consolidation across the insurance distribution landscape remain as prevalent today as ever”
Trevor Baldwin,
Baldwin Risk Partners
“More specialized, consultative brokers are going to have more new business opportunities than the average firm that’s doing business like they were 30 years ago”
Gerard Vecchio,
MarshBerry
“Sellers no longer view a robust technology offering as a nice-tohave item; if a buyer isn’t bringing technology enhancements as a value proposition to the table, they are going to lose out on more transactions than they win”
Timothy J. Hall,
Relation Insurance
“Traditionally, financial services have not been the first investment area for most private equity funds, but today, insurance is an attractive industry because it has been stress-tested”
Phil Trem,
MarshBerry
In Partnership with
M&A
Insights 2021
Insurance Business America uncovers the answers to brokers’ biggest questions about mergers and
acquisitions, with expert insight from MarshBerry, Baldwin Risk Partners and Relation Insurance
Read on
Trevor Baldwin
Baldwin Risk Partners
Phil Trem
MarshBerry
Timothy J. Hall
Relation Insurance
Gerard Vecchio
MarshBerry
Industry experts
RESILIENT. It’s a term often used to describe the insurance distribution market, which continues to attract the hungry eyes of the investment community. Despite the COVID-19 pandemic and its socioeconomic challenges, the insurance distribution sector has remained resilient. As such, it’s no surprise that merger and acquisition activity in insurance distribution soared to record heights in 2020.
Deal activity got off to a roaring start last year. Buzzing with energy after a record year of transactions in 2019, well-capitalized acquirers (both private-equity-backed and public companies) continued to build on that momentum and snap up insurance distribution firms. Many of the deals completed in January and February were negotiated and agreed to back in 2019, before the coronavirus pandemic brought the world to a halt.
In March 2020, when the World Health Organization declared COVID-19 a global pandemic, credit markets froze for several weeks, and insurance M&A activity petered off as buyers and sellers tried to assess the potential impacts of the pandemic – but that turned out to be a temporary pause.
attractive from an investment perspective.
According to MarshBerry, the US saw a record deal count of 705 announced transactions in 2020, up from 648 in 2019. In addition, 57 firms made two or more acquisitions in 2020, compared to 49 in 2019. However, the total number of firms making acquisitions was higher in 2019 (202 versus 169 in 2020).
What does all of this mean? According to Phil Trem, president of MarshBerry’s Financial Advisory division, “it likely shows fewer independent firms are buying due to continuing COVID-19 concerns. Those that were in acquisition mode leaned into the accommodating conditions of the marketplace. Fewer firms tried their hand at acquiring, while established buyers took full advantage of a hyperactive market.”
“Many buyers returned to the market over the course of 2020,” says Trevor Baldwin, CEO of Baldwin Risk Partners, “and we even saw new entrants as agency performance again proved resilient amid times of economic stress, reiterating the quality and durability of the industry as a whole.”
Indeed, the factors driving consolidation in the insurance distribution landscape remained as prevalent in the COVID-19 era as before. For sellers, core motives included a quest for scale and additional resources (especially technology), lack of internal perpetuation, and a desire to capitalize on record-high valuations. Buyers, on the other hand, are interested in agencies and brokerages for their resilience, which has been proven through tough economic times like the Great Recession and the current pandemic. Insurance distributors have been able to produce predictable and consistent revenue streams coupled with high margins, making them
Deal valuations also reached all-time highs in 2020, exceeding the records set at the end of 2019. “In the fourth quarter of 2020, valuations on top-rated platforms were approximately 10% higher than in the first quarter,” Trem says. “So, valuations realized during the pandemic, on average, were higher than they were pre-pandemic, which is not a trend we expected. Because of the resiliency of the insurance industry ... existing buyers renewed their acquisition appetite, while new entrants, impressed with this resiliency, added to an imbalance of buyer appetite. With more buyers in the space and heightened demand, valuations were inevitably driven higher.”
It’s unclear how long this valuation trend will last, given the potential for capital gains tax hikes under the Biden administration, but at the onset of 2021, deal activity in the US has kept pace with the frenzied finish of 2020. “While there remains uncertainty on when COVID-19 will ‘end,’ I believe that the insurance agency acquisition ecosystem has adapted to efficiently and effectively complete transactions in an alternative environment,” says Timothy Hall, EVP and head of mergers and acquisitions at Relation Insurance. “As indicated by the record number of transactions, deals still got done in 2020, and trends point to that continuing in 2021.”
One thing is certain: Investment interest in the insurance distribution market remains high, even in these unprecedented times. With that in mind, IBA spoke to several M&A experts about key themes that are likely to dominate insurance mergers and acquisitions in 2021, from economic conditions and digitization to succession planning and the role of private equity. IBA hopes their insights will provide readers with an enhanced understanding of the current state of the insurance distribution M&A market in the US.
professional liability/directors & officers liability lines of business. Furthermore, with the historically low cost of debt capital – one could argue that the real cost of debt capital is close to zero – buyers may be incentivized to pay premium valuations due to their ability to finance acquisitions at near zero borrowing costs.
Trevor Baldwin: At a macro level, the fundamental forces that have driven consolidation across the insurance distribution landscape remain as prevalent today as ever. Scale increasingly matters, tech enablement – and the ability to invest in tech capabilities – is increasingly enhancing the value brokers can deliver for their clients, and robust valuations have made it increasingly difficult for principals to economically perpetuate ownership internally.
Additionally, the onset of COVID-19 in early 2020 and the uncertainty that came with it, coupled with the threat of increasing capital gains tax rates under a new presidential administration, brought a wave of incremental private sellers to the table. While we saw a brief pause in activity from some of the more active acquirers in early 2020 due to the COVID-19 pandemic, activity picked up through the end of the year from both strategic and private equity players.
With the presidential election uncertainty behind us, we expect a continued focus on potential tax increases and availability of attractive debt financing to drive robust M&A activity and sustained valuations through 2021.
Timothy Hall: Twenty-twenty saw, and 2021 continues to see, a frenzied pace of M&A activity in insurance distribution. A couple of factors helped drive the highest level of closed transactions on record, despite COVID, including an increase in the number of wellcapitalized acquirers, both PE-backed and public companies; potential changes in the capital gains and corporate tax rates; and the general resiliency of the insurance distribution sector.
There are approximately 30 firms that are serial acquirers of insurance agencies. Most of these buyers are private equitybacked firms, while public companies like Gallagher, Brown & Brown, Baldwin Risk Partners and Marsh – via Marsh & McLennan Agency – are also extremely active. The pool of acquirers who have financial sponsors grew in 2020 as several new firms were formed.
Firms that are electing to sell or partner with an ‘aggregator’ firm range from true platforms with significant revenue – more than $20 million – to smaller ‘tuck-in’ agencies. Twenty-twenty saw an uptick in the number of top 100 broker acquisitions and a significant uptick in tuck-in activity among all players. Firms that
are selling do so for a variety of reasons, including a desire to crystallize their investment – and likely single largest asset – at current market valuations, a lack of internal perpetuation and a recognized need for additional scale and resources.
BRP is an award-winning entrepreneur led and inspired insurance distribution holding company delivering solutions that give our clients the peace of mind to pursue their purpose, passion and dreams. Our family of firms’ best-in-class resources and diverse portfolio of services are innovating the industry by taking a holistic and tailored approach to insurance, risk management and employee benefits.
Find out more
Founded in 1981, MarshBerry has grown to become the nation’s #1 M&A Advisory Firm and top growth consultant to insurance agents & brokers, specialty distributors, private equity firms, banks & credit unions and insurance carriers, through industry-specific services that include: Merger & Acquisition Advisory, Debt & Equity Capital Raising, Organic Growth Consulting, Market Intelligence and Connect–Peer Exchange Network.
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Relation Insurance Services, formerly Ascension Insurance, is a specialty insurance brokerage that offers superior risk-management and benefits-consulting services through our family of brands across the United States. More importantly, we’re a team of experienced professionals who genuinely care. Whether it’s for you, your family, or your business/organization, we want to be the relationship you trust for answers to your questions, solutions for your insurance needs, and peace of mind for your future.
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Baldwin Risk Partners
Trevor Baldwin
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Mashberry
Phil Trem
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Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo orci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Relation Insurance
Timothy J. Hall
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Velit egestas vel ornare pellentesque ridiculus. Mauris tempor augue quis mattis suspendisse feugiat commodo posuere. Faucibus massa adipiscing nullam elit, ac vel accumsan. Phasellus eget ac dignissim fermentum ac placerat elit, metus. Nulla porttitor ante egestas molestie quis quam. Pharetra magna sit mauris tellus gravida rutrum libero sit. Justo or24ci cras euismod proin massa lorem ut. In non tellus phasellus faucibus ullamcorper nullam odio dui et.
Mashberry
Gerard Vecchio
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Adapting strategies: education, technology, specialization
Published Dec 09, 2024
Challenges, opportunities, and industry stabilization
Based in Atlanta Georgia, EPM is a world-class global team of mortgage experts with diverse backgrounds who share a passion for leading EPM. Our team features an integrated range of knowledgeable people who guide us in fulfilling our commitments to our community and those who serve. EPM's management team has more than 50 years' experience in the mortgage industry, providing exceptional pricing without compromising follow through, and customer service for thousands of clients annually. The organization has 23 fundamentals that EPM promotes, with "4CORE" principles at the top.
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What are the key growth drivers for 2025?
Bohn emphasized the importance of both talent acquisition and product evolution. Over the past year, his team has expanded its expertise by bringing in new talent on both the customer-facing and underwriting sides. At the same time, his firm has focused on evolving its product set to meet the needs of brokers seeking alternative solutions. This dual focus has allowed the company to stay ahead of market demand while positioning brokers to better serve underserved borrowers, such as the self-employed.
For Perez, the shift toward third-party origination (TPO) has been a game-changer. This strategic pivot, made in late 2023, has allowed his team to dedicate more resources to educating brokers and loan officers.
“We’ve also been teaching them how to do content creation, because that’s a really important way to brand and grow yourself,” he said. Perez believes brokers are well-positioned to gain market share as originators increasingly look for ways to offload some of their workload. TPO provides a natural solution, empowering brokers to step into that gap while building their personal brands through strategic content creation.
He also stressed the importance of being proactive and not treating non-QM products as a last resort: “Too often, we’ll be approached with a deal that fell out three times, and we now have six days. That sets
what you do, you’ll have no issue growing your share in the market – even if it takes a lot of time and effort to do so.”
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Licensed in all 50 states, plus D.C., PCV Murcor provides nationwide appraisal management and valuation advisory services for residential and commercial real estate. An industry leader with over 40 years of experience managing valuation needs for mortgage lenders and servicers, financial institutions, investors, federal agencies, and the GSEs. Our mission is to help clients and their customers make their real estate needs happen through accountability, connectivity, and performance. Our use of state-of-the-art AI technology ensures precision and efficiency in every aspect of our service. Experience innovation-powered precision and time-tested excellence with unparalleled service and cutting-edge products.
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Licensed in all 50 states, plus D.C., PCV Murcor provides nationwide appraisal management and valuation advisory services for residential and commercial real estate. An industry leader with over 40 years of experience managing valuation needs for mortgage lenders and servicers, financial institutions, investors, federal agencies, and the GSEs. Our mission is to help clients and their customers make their real estate needs happen through accountability, connectivity, and performance. Our use of state-of-the-art AI technology ensures precision and efficiency in every aspect of our service. Experience innovation-powered precision and time-tested excellence with unparalleled service and cutting-edge products.
Find out more
News
MORTGAGE INDUSTRY
BEST IN MORTGAGE
SPECIALTY
TV
resources
US
CA
AU
NZ
UK
Newsletter
About us
Authors
Privacy Policy
Conditions of Use
Terms & Conditions
Contact Us
Sitemap
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Copyright © 1996-2024 KM Business Information US, Inc.
