While the current climate is not especially conducive to mergers and acquisitions, don’t discount their possibility altogether, a new report says.

The report, Down But Not Out: The M&A Marketplace for Insurance Agencies and Brokerages in 2009, was published by Atlanta-based Reagan Consulting.

“The slowdown in deals is simply not as a bad as some headlines would have us believe,” says Bobby Reagan, the firm’s CEO.

The report contrasts the current climate from 2006 to 2008, when a spate of deals involving agencies and brokerages was consummated. Reagan cites three factors for the rash of activity during that period, including strong market valuations for acquisitive public brokers, low borrowing costs and the growth of bank insurance.

“Buyers and sellers are more deliberate and cautious today than they were one or two years ago,” says Reagan. “And the conservation of capital and various uncertainties are causing some restraint in M&A activity.

Reagan says that while economic and political uncertainties may further dampen the pace of the activity, the deals will continue.

“While we’ve seen a retreat in the factors that propelled the three-year increase in activity and values, other fundamental drivers are solidly in place,” he says.

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