Richard Stewart Remembered

News that legendary former NYS Superintendent of Insurance Richard E. Stewart died at age 85 on October 13 was received with sadness across the industry. He was the Superintendent of the New York State Insurance Department from 1967 to 1971, and became a leader in insurance in the United States and recognized internationally.

He initiated legislation that transformed insurance regulation in New York State and nationwide, including exploration of the potential of no fault auto insurance, establishing an insurance pool to make essential fire insurance available to residents of urban ghettos, a program to make auto insurance more widely available, to protect consumers against insurance cancellation and against loss due to insurer insolvency and changed property liability insurance rate regulation to an open competitive and antitrust basis. Governor Nelson Rockefeller described him as “the best Superintendent of Insurance in the history of the State.” He went on to be Senior Vice President and General Counsel of First National City Bank, now Citibank and Citigroup. In 1973, he became Senior Vice President and Chief Financial Officer of Chubb & Son. In 1981 left to start his own firm, Stewart Economics, Inc., a consulting firm that specialized in insurance and insurance regulation. His major work became consulting for legal teams involved in major controversies such as water pollution and the national breast implant cases. He was a member of the Special Panel for the U.S. Senate Committee on Presidential Campaign Practices (1974) and the United Nations Panel of Experts on Transnational Bank Failure. Mr. Stewart was graduated summa cum laude from West Virginia University where his father was president of the university, after which he earned Congratulatory First-Class Honors in Roman Law at Queen’s College Oxford, where he was a Rhodes Scholar. Following Oxford, he served in the U.S. Army providing legal assistance to soldiers of the U.S. Army 43rd brigade of Hawaii which had been distinguished for its bravery during WWII. He then earned his jurisprudence degree with honors from Harvard Law School in 1959. RIP.… Data covering property / casualty and employee benefits brokers shows that big players continue to pay top dollar for acquisitions in the US and Canada. More than 490 announced insurance agency mergers and acquisitions during the first three quarters of the year, according to OPTIS Partners’ M&A database. It was the highest nine-month total ever, beating the 481 deals announced in 2018.

The data covers U.S. and Canadian agencies selling primarily property-and-casualty insurance, agencies selling both P&C and employee benefits, and those selling only employee benefits.

There were 158 transactions in the third quarter alone, making it the second most-active third quarter ever.

The OPTIS Partners report breaks down buyers into four groups: private equity-backed/hybrid brokers, privately held brokers, publicly held brokers, and all others.

PE/hybrid buyers continue to lead all buyer groups with 66 percent of the total transactions through the first nine months (320 in total). Acquisitions by privately owned agencies were the next most active group, accounting for 20 percent of deals.

For the nine-month period, Acrisure led all buyers with 71 transactions, followed by Hub International Limited (37), Gallagher (27), Broadstreet Partners (27), and AssuredPartners (26).

The reports break down sellers into four groups: property & casualty brokers, P&C/benefits brokers, employee benefits agencies, and all others.

Sales of P&C agencies continue to dominate the seller landscape with 252 announced transactions, followed by employee benefits agencies (123 sales), P&C/benefits brokers (63 deals), and all others (52 transactions).

“Recent economic data is somewhat mixed but generally less optimistic than in recent periods.  We’ll have to wait and see what, if any, impact this has on buyer appetites and valuation practices,” said Timothy J. Cunningham, managing partner with OPTIS Partners.

A few of the larger buyers have been acquiring stand-alone wealth management/investment advisory firms.  Thus far, OPTIS has not included these transactions in its report.

-SA