August 24th, 2015

PA/MGA Growth Through Acquisitions, Part II

Posted at 1:00 AM ET

The vast majority of the respondents to Guy Carpenter’s survey of managing general agents intend to use company funds or company stock (if applicable) to make acquisitions (81 percent this year versus 47 percent in 2012). Despite access to bank financing, private equity and venture capital options, respondents showed no interest in employing those financial vehicles. It appears insurance companies continue to have ample capital and would use their own resources rather than go to outside sources.

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As excess capital continues to absorb business and stifle organic growth, carriers will likely have to consider acquisitions in order to attain any meaningful growth.

Link to Part I>>

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