The insurance broker Brown & Brown announced its plan to acquire rival Accession Risk Management for approximately $10 billion during Tuesday’s announcement. The insurance industry has experienced a major consolidation trend through this acquisition which stands as one of the largest in the sector.
The insurance industry sector has experienced this deal as one of its largest acquisitions despite its typical pattern of smaller-scale acquisitions. The company initiated a $4 billion stock offering to secure funds needed for the acquisition. The company’s stock price dropped by 3% during premarket trading.
Risk Strategies was founded by insurance veteran Mike Christian in 1997 under Accession which operates as its parent company and includes wholesale insurance distributor One80 Intermediaries. The acquisition will improve Brown & Brown’s market position and competitive advantage according to the company.
The insurance broker industry continues to pursue strategic acquisitions despite economic uncertainty because these deals help build long-term business strategies. The fragmented nature of the industry leads analysts to predict additional deals will occur.
The acquisition by Brown & Brown of Accession demonstrates how companies are choosing expansion through mergers to adapt to market changes and satisfy client requirements.
