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Aggregate insurance broker deal values hit lowest point in 4 years during Q3

The pace of outsized insurance deals slowed sharply in the third quarter as only two transactions valued at more than $500 million were announced during the period.

There was a slight uptick in the number of insurance underwriter deals compared to the prior quarter, with 20 announced transactions during the period valued at $5.64 billion, compared with 15 announced deals for a total value of $5.65 billion in the second quarter, according to S&P Global Market Intelligence data.

For insurance brokers, activity slowed modestly quarter over quarter with 113 deals announced, down from 139 deals announced in the second quarter. The total value of those 113 deals, $13.9 million, was the lowest aggregate deal value for insurance brokers since the first quarter of 2013 when there were 51 deals announced with a total value of $13.3 million.

The largest insurance transaction announced in the quarter came from Centene Corp., which said Sept. 12 that it planned to acquire nearly all of Fidelis Care's assets through New York State Catholic Health Plan Inc., which does business as Fidelis Care New York, for $3.75 billion. Analysts called the still-pending deal a "strong fit" for Centene as it looks to strengthen its stake in Medicaid and state exchanges.

The second-largest deal announced in the quarter came from Markel Corp., which agreed July 26 to acquire State National Cos. Inc. for $922.6 million. If the deal is approved, State National would become a separately run business unit of Markel, allowing the company to enter the insurance technology space and other fields.

For the quarter, deal values saw a dramatic drop-off outside of Markel's bid for State National. The combined value of the next eight largest deals among insurers and brokers announced in the third quarter was $961.6 million, with the third-highest deal value coming from Kuvare US Holdings Inc.'s $280.0 million cash bid to acquire United Life Insurance Co.

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