Insurance industry defies slowdown: 6 PE-backed deals in the sector

Brookfield, Serent Capital, Braemont Capital and Madison Dearborn are some of the firms finding opportunities in insurance.

Deal activity in the insurance sector has largely been strong this year in contrast to the slowdown in other areas, noted PwC in its mid-year outlook.

For the six-month period from mid-November 2022 to mid-May 2023, PwC recorded 194 announced transactions representing over $7 billion in deal value, compared to 263 announced transactions and $2 billion in deal value in the previous six-month period from mid-May 2022 to mid-November 2022.

“Despite uncertainty around interest rates and the US economic environment, we expect insurance deal activity to remain very active through the remainder of the year,” noted Mark Friedman, PwC Insurance deals leader, in its report. “We are seeing increased demand by private equity buyers seeking to acquire insurance brokerages, managing general agencies and blocks of life and annuity businesses.”

Between June and August, PE Hub has seen a steady flow of deals in this sector. Below we round up six North America-focused insurance PE deals.

1. Brookfield Reinsurance to buy AEL for $4.3bn

Brookfield Reinsurance, an affiliate of Brookfield Asset Management, in July agreed to acquire American Equity Investment Life Holding Company (AEL), a West Des Moines, Iowa-based life insurance business for $4.3 billion. The deal is expected to close in the first half of 2024.

“This transaction represents an important step in the continued growth of our insurance business, further diversifying and scaling our insurance capabilities, and is a direct result of the partnership we have developed with AEL since our initial investment in 2020,” said Sachin Shah, CEO of Brookfield Reinsurance, in a statement.

2. Braemont Capital invests $125m in Incline P&C Group

Dallas based Braemont Capital earlier in June invested $125 million in Incline P&C Group, an Austin-based insurance program market services firm.

Incline’s current programs cover lines that include private passenger auto, cargo, commercial auto, flood, homeowners, motorcycle, pet and workers’ compensation insurance.

Robert Covington, managing partner of Braemont, said the investment will help expand the company. “The company has experienced incredible growth in premium volume and program acquisition and through this investment, we are excited to join Incline on their mission to continue to be the premier insurance program market services firm,” he said.

3. Serent Capital-backed XDimensional Technologies buys I-Engineering

XDimensional Technologies, which is backed by Austin headquartered Serent Capital, in June acquired I-Engineering, a Shelton, Connecticut-based insurance software.

XDimensional Technologies is an insurance technology provider.

“Adding the product suite from I-Engineering, along with their talented team, allows us to grow the combined company and better serve our customer base of over 400 entities focused on the insurance sector,” said Lani Cathey, CEO of XDTI in a statement.

4. Monument MicroCap-backed Command Investigations acquires Infoquest

Command Investigations, a portfolio company of Monument MicroCap Partners, acquired Infoquest Information Services, a Columbus, Ohio-based provider of professional investigation and information services for insurance claims defense and business information in June.

Based in Lake Mary, Florida, Command Investigations is a full-service private investigation company.

5. Madison Dearborn-backed Navacord buys Medi-Quote Insurance Brokers

Navacord, a portfolio company of the Chicago based-Madison Dearborn Partners, earlier this month acquired Medi-Quote Insurance Brokers, a Winnipeg, Canada-based insurance brokerage specializing in travel and medical insurance.

Based in Toronto, Navacord is a multi-line insurance and risk management brokerage business.

6. Hub International acquires Golden Ears Insurance Services

Hub International, backed by Hellman & Friedman, Altas Partners and Leonard Green & Partners, earlier this month acquired Golden Ears Insurance Services, a Surrey, British Columbia-based general insurance broker specializing in commercial transportation, property and automobile fleets.

Hub International, headquartered in Chicago, is a full-service global insurance broker and financial services company providing risk management, insurance, employee benefits, retirement and wealth management products and services.