Insurance agency mergers and acquisitions dip in first quarter

The pace of M&A activity slowed slightly in the first quarter of 2026 versus 2025, but the downward trend appears to be bottoming out, according to OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance industry.

Firms announced 148 insurance agency mergers and acquisitions in the first quarter, down 6% from Q1 2025, the OPTIS Partners database reveals. It was the 10th consecutive quarter of deal volume below the long-term trend line.

“The industry has ridden down a three-year slide in deal volume, which we believe is beginning to bottom out to about 650 deals per year,” said Steve Germundson, a partner of the firm.

Private-equity-backed firms top buyers

OPTIS Partners tracks buyers by four groups: private-equity-backed/hybrid buyers, privately held brokers, publicly held brokers, and all others.

Some 55 unique buyers were active last quarter. Twenty-nine were private-equity backed, including four that announced their first deal. Nineteen were privately held, with five entering the market for the first time.

Private equity-backed buyers accounted for 72% of all acquisitions in Q1. Besides insurance brokers such as BroadStreet, they now include institutional investors such as family offices, pension funds, and sovereign wealth funds.

Inszone and BroadStreet Partners led all buyers in with 17 and 16 deals in Q1 ’26, respectively. Inszone doubled its activity year-over-year while BroadStreet stayed the same. Next was World Insurance Associates at nine deals in Q1, similar to the prior year, and ALKEME closed seven transactions. Six other firms did at least five deals in Q1.

Historically very active buyers, Hub International, Keystone Agency Partners, Highstreet Insurance Partners, and King Risk Partners all did notably fewer deals in Q1.

P&C agencies were main sellers

Sellers are placed in four categories: property/casualty agencies, employee benefits agencies, combination P&C/benefits agencies, and all others. The latter includes third-party administrators and related managing general agent operations, and agencies solely focused on life insurance, investment or financial management, consulting, and other businesses connected to insurance distribution.

P&C sellers accounted for 101 transactions (68% of the total). P&C/Benefits agencies sales totaled 15 (10%), and there were 14 sales of benefits agencies (9%). All other sellers accounted for 20 deals (13%).

Forecast: Ample demand for acquisitions

The roughly 30 active private-equity-backed brokers, plus active private and public buyers, are driving ample demand for acquisitions, according to OPTIS managing partner Tim Cunningham.

“The vast majority of the 25,000 to 30,000 firms nationally are very small and will have to be sold eventually,” Cunningham said. “We are seeing an emerging group of new ventures backed by private-equity and family-office capital pursuing this group because of the large supply of future sellers, enhancements in technology, and long-term changes in the way insurance at the smaller end will be sold and serviced.”

Somewhat larger firms are also very attractive to buyers, partly due to a perceived scarcity factor and the overall improvements these businesses have made over the years. “Many of these firms will also be sellers in the not-too-distant future,” he added.

Meanwhile, production teams are leaving to start their own firms. “We expect to see this continue,” Cunningham said.