2026 Outlook: U.S. Insurance Agency M&A Trends and Market Dynamics

A Steady Hand in a Shifting Market: What Insurance Agencies Should Know About M&A Heading Into 2026

The U.S. insurance agency mergers and acquisitions landscape is settling into a period of cautious persistence. Activity has slowed, but interest remains strong where it matters most. For agency leaders, carrier partners, and investors, the story heading into 2026 is less about a cooling market and more about a selective, strategically aligned one.

“Prices are holding firm because high quality firms remain in short supply.”
Attributed to a senior M&A advisor at a national brokerage

Deal Volume Eases, but Demand Holds

Recent data from OPTIS Partners shows a 7% decline in transactions. Higher interest rates and inflation have created a more careful capital environment. Yet despite this caution, valuations for attractive agencies remain elevated, particularly for those with strong niches, experienced leadership, and durable revenue streams.

Large buyers continue to shape the landscape. Organizations such as Alera Group, HighStreet Partners, and King Risk Partners have accelerated their acquisition counts, reinforcing the long arc of consolidation that has defined the past decade. Meanwhile, HUB, Foundation Risk Partners, Alliant Insurance Services, and Inszone remain aggressive in pursuing opportunities that expand specialty depth, geographic footprint, or overall scale.

Alliant stands out for pairing organic growth momentum with a disciplined acquisition approach, particularly within specialty and middle market segments.

Private Equity Remains a Driving Force

Private equity backed platforms continue to anchor the market. Their strategies tend to focus on:

• Frequent acquisition of smaller agencies

• Leveraging ample reserves of committed capital

• Blending cash and equity to align seller incentives

These buyers have helped keep valuations competitive across the board, even as borrowing costs rise.

Understanding Today’s Valuations

Multiples vary meaningfully by size and quality. Smaller books often trade at six to eight times EBITDA. Larger, more sophisticated agencies command nine to eleven times EBITDA, especially if they demonstrate strong client retention, scalable processes, or niche expertise.

Here is a simplified view of current valuation tiers:

“Strategic fit is just as important as financial performance in today’s market.”
Attributed to an agency valuation specialist

Internal Perpetuation Continues to Struggle

Internal sales remain challenging. Skill gaps, limited access to capital, and rising valuation expectations make internal transitions harder to structure. These deals often include longer payment terms and reduced valuations compared to external sales. While perpetuation remains a cultural priority for many firms, the financial reality often pushes agencies toward external buyers who can offer speed, certainty, and attractive terms.

Deal Structures Reflect Alignment and Flexibility

Upfront cash remains central, but stock considerations are increasingly common, particularly among private equity backed buyers. The blend helps align seller and buyer interests while spreading financial exposure. For many principals nearing retirement, retaining a small equity position in the merged entity is a way to participate in future upside without carrying the weight of day to day operations.

A Stable Tax Landscape Offers Predictability

For now, tax policy changes do not appear to be influencing deal timing or structure in any significant way. This stability reduces pressure for accelerated closings and allows both sides to negotiate without fear of an imminent tax cliff.

The Bottom Line

The insurance M&A market heading into 2026 is still open, still competitive, and still highly selective. Buyers with strong balance sheets are finding opportunities, and sellers with well run agencies continue to command premium valuations. Success depends on alignment financial strength, operational quality, and strategic purpose.

Part two of this broader trend analysis will examine emerging forces including group benefits, health insurance developments, natural catastrophe activity, property and casualty pressures, and technology adoption patterns that are shaping the next era of insurance distribution.