Insurance M&A: On the cusp of a new era?

Whilst merger and acquisition (M&A) markets have remained relatively subdued in the years since the pandemic, insurance transactions have kept ticking along.

Private equity investment driving broker M&A activity

There has been a consistently strong appetite for broker M&A, mainly driven by private equity (PE) directly investing into broker and managing general agencies (MGA) platforms and, indirectly, through acquisitions by such platforms as part of roll-up/consolidation strategies. This trend has been seen across the US, UK and increasingly mainland Europe and, given these fundamentals, the volume of deals has been significant, albeit due to the volume and the nature of the roll-up strategy, average deal size has been comparatively low.

Blockbuster broker M&A deals

However, 2024 saw a string of blockbuster broker M&A deals announced, including the acquisition of NFP by AON, that of McGriff by Marsh McLennan and, just before the end of 2024, Arthur J Gallagher’s proposed purchase of AssuredPartners. In light of this, are we seeing a fundamental shift in the market, with the insurgent broker-consolidators finding themselves in the headlights of their larger listed competitors?

In this article, we reflect on 2024 and explore what hot topics may shape insurance M&A in 2025 and beyond:

• More PE investment and more consolidation for brokers and MGAs
• Strategic interest in consolidators
• Prospects for MGAs: Growing uncertainty in a packed market
• The dawn of a new era of insurance carrier M&A?
• Continued impetus for transactional activity in the life sector

Indications are that 2025 will see the start of a new phase in the cycle and it could be a busy year for M&A across the insurance sector with activity driven by the various different factors and tailwinds discussed above.