Insurance Brokerage M&A Slows Early 2025 but Poised for Rebound
The insurance brokerage M&A market experienced a slowdown in the first quarter of 2025, with only 141 announced transactions, marking a 15% decline compared to the same period last year and the slowest quarter since mid-2020.
This continues a trend of nine consecutive quarters below the long-term average, although experts anticipate a potential rebound later in the year due to the large pool of active buyers and upcoming sizable deals.
The vast majority of deals involved U.S.-based agencies, with Canadian brokerages making up a very small portion. Private equity-backed buyers dominated the market, accounting for nearly three-quarters of all transactions despite representing a smaller number of companies, underscoring their significant capital and acquisition appetite.
Publicly traded and privately held brokers also participated but to a lesser extent. Major individual buyers like BroadStreet Partners, World Insurance Associates, and King Insurance Partners led in deal volume, while Arthur J. Gallagher made high-profile acquisitions including the proposed purchase of AssuredPartners and the acquisition of Woodruff-Sawyer. Property and casualty agencies were the primary sellers, constituting over two-thirds of the transactions, while employee benefits-focused agencies comprised a smaller share.
Other deals involved related sectors such as third-party administrators and managing general agents. Analysts suggest the second half of 2025 may feature increased large-scale transactions, supported by private equity recapitalizations and sales of sizable privately owned agencies.
The Woodruff-Sawyer acquisition is cited as an indicator of this emerging trend toward headline-grabbing deals. The sector posted strong M&A activity in 2024, with 847 transactions representing a 5% increase from the previous year, suggesting a foundation for renewed growth as economic and interest rate conditions stabilize. Increased deal activity is expected if market valuations become more favorable to sellers, potentially accelerating consolidation in insurance distribution.