top of page

A takeover wave amongst Dutch insurance brokers is taking place

Private equity is growing its footprint in the Dutch insurance brokerage industry. An attractive financial profile, large consolidation potential and the possibility for ‘multiple-arbitrage’ led them to be responsible for 21% of all acquired revenue over the last two years. IG&H and PhiDelphi Corporate Finance jointly investigate the drivers for and impact of the M&A wave that is currently taking place.

A takeover wave amongst Dutch insurance brokers is taking place Dutch firms active in insurance distribution (‘brokers’) are interesting to various types of investors. Due to this wide variety of potential buyers over 65 large public transactions have taken place over the last two years, and 2020 has already kicked-off with multiple impactful transactions. Recent developments regarding the coronavirus will impact this trend as is discussed below.

The sector is changing as a result of this M&A wave. Valuations have risen to as much as 14-15x EBITDA for the largest advisors and nearly all market segments are concentrating. The overwhelming interest in the sector might come as a surprise as the sector suffers from decreasing commission rates and increasingly stringent legislation. IG&H and PhiDelphi Corporate Finance investigate who are the buyers and sellers, what drives them and what the outlook is for the M&A surge.

Private equity creates foothold, but brokers remain the largest buyers Incumbent managing general agents (‘volmachten’) were the most active buyers, both in number of deals as in sum of acquired revenues. These brokers can create value relatively easily by transferring regular brokerage portfolios towards their mandated portfolios, while deduplicating the operation from costs.

Out of all acquired volume, 21% has been acquired by private equity (PE). Their share of deals in terms of numbers is low (6%), but these are often impactful transactions involving large brokers. Large quantities of ‘dry-powder’ looking for investments and an attractive, predictable, financial profile make large brokers attractive targets. Next to these drivers the potential for ‘multiple-arbitrage’, where they profit from the fact smaller brokers trade against lower multiples than larger brokers, is often used to create financial value.

M&A wave to continue on the longer term Drivers of the current M&A wave such as synergies in both the top- as bottom-line and ageing boards of management will be relevant in the future as well. On top of that, there is still room for further consolidation from two points of view. The first is that most segments are still highly dispersed with a large longtail of smaller brokers, which are often inactive. The second view considers concentration: most non-life segments are nearly not as concentrated as the Group D&A and Pension segments, indicating there is room for consolidation amongst larger brokers as well.

It is evident that the coronavirus will impact the wave on the short to mid-term. All investors are dealing with more urgent matters like managing current businesses and capital availability is likely to decrease on the short term as well due to uncertainty. On the longer term, when business goes back to normal, the identified value pools and drivers will however pursue to exist.

An important precondition for successful continuation of the M&A surge is long term customer value creation. IG&H and PhiDelphi see two successful strategies: extensive backwards integration, and/or as part of a strategic move to create a broad ecosystem in which insurance brokerage is just part of the solution provided to customers.

If you are interested in the sector or would like to discuss the findings in depth you can contact:

Jan Pieter van der Helm Director Financial Services at IG&H E:

T: +31(0)622554190

Harald Miedema Partner at Phidelphi Corporate Finance E:

T: +31(0)611517340


Interested in what IG&H can do for you? Contact us!


bottom of page