Management consulting firm Aon said on Wednesday it will buy insurance broker NFP in a deal valued at $13.4 billion to expand in the fast-growing middle-market segment across risk, benefits, wealth and retirement plan advisory.

Demand for insurance products has remained firm in an uncertain economy and the sector is considered recession-proof as many policies are often guaranteed by employers, while some are mandated by the government.

The deal with funds affiliated to private equity owners Madison Dearborn Partners and HPS Investment Partners is expected to close in mid-2024 and will be funded with $7 billion in cash and $6.4 billion in Aon stock.

NFP is a property and casualty brokerage, which offers benefits consulting, wealth management and retirement plan consulting for clients with more than 7,700 employees.

Its CEO Doug Hammond will continue to lead the business and will report to Aon President Eric Andersen.

The New York-based company reported annual revenue of $738 million in the property and casualty segment in 2022, its website showed. Annual revenue at its benefits and life business was $1.11 billion.

Insurance brokers serve as a bridge between an insurer and its customers, helping clients find a policy which best suits their needs.

Aon said it expects the deal to generate more than $2.8 billion in pre-tax gains, which excludes about $400 million in one-time transaction and integration costs.

In October, the company reported a third-quarter profit that beat analysts' estimates, helped by growth at its commercial risk solutions business.

UBS Investment Bank was the exclusive financial advisor to Aon on the transaction. Citi is advising it on the deal financing.

(Reporting by Manya Saini in Bengaluru; Editing by Arun Koyyur)