Private Equity-Backed Insurance Distributors Are Still Shopping

What You Need to Know

More than 4,000 independent agencies are still out there.
One seller turnoff: Weak sales and profits.
Another turnoff: Foggy financial reporting.

One of the private equity leaders supporting a vast wave of life, health and annuity agency purchases says the buyers still have cash they can use to make deals.

Edward Shahnasarian, a managing director in the Financial Technology & Services area at Thomas H. Lee Partners (THL), estimated Tuesday, in an email interview, that companies like AmeriLife have acquired about 200 to 300 U.S. insurance agencies and brokerage firms in the past few years.

That leaves about 4,000 to 5,000 independent agencies available for purchase, Shahnasarian noted.

“The majority of the remaining firms could be good fits for acquisition by an existing large, PE-backed platform like AmeriLife,” Shahnasarian said.

What It Means

If you have a successful agency you’d like to sell, you may still be able to find buyers.

THL

THL is an investment firm that has raised about $35 billion in capital and used the capital to invest in about 170 companies. The investment targets have used cash from THL and other sources to make about 600 additional deals with a total value of more than $250 billion.

Shahnasarian has helped THL oversee its relationship with AmeriLife, a Clearwater, Florida-based distributor that has grown rapidly through acquisitions. AmeriLife now has relationships with about 300,000 agents and advisors, and the RIAs in its network have $7.5 billion in assets under management.

AmeriLife competitors include Integrity Marketing, Simplicity and NFP.

Shahnasarian also helps to oversee THL’s relationships with Hexure, an annuity illustration system company, and Hightower Advisors, an RIA firm.