Insurance brokerage M&A’s slow down in early 2025

The insurance brokerage M&A engine hit a soft patch in early 2025, logging its slowest quarter since the pandemic-era downturn of mid-2020. Just 141 insurance agency mergers and acquisitions were announced in the first quarter, down 15% from 166 deals during the same period last year, according to a new report from OPTIS Partners.

That tally continues a cooling trend: the past nine quarters have all fallen below the long-term average. But experts suggest the dip may be temporary, as industry fundamentals—and a looming wave of large-scale deals—still point to a robust year ahead.

“We think the pace will ultimately pick up this year because of the large number of active buyers in the market,” said Steve Germundson, a partner at OPTIS Partners, a Chicago-based investment bank focused on insurance distribution. “Although current economic uncertainties may cause a bit of a delay.”

The overwhelming majority of deals—139 out of 141—involved U.S.-based agencies. Canadian brokerages accounted for the remaining two.

Private equity-backed buyers dominate

While the overall number of transactions dipped, one trend held firm: the dominance of private equity-backed buyers. These firms handled nearly three-fourths of all deals in the quarter—103 of the 141—despite representing just 26 companies.

Privately held brokers closed 25 acquisitions, while publicly traded brokers accounted for 13.
“Private equity continues to set the pace,” said Germundson. “They’re still the ones with the capital and the appetite.”

Among individual buyers, Columbus, Ohio-based BroadStreet Partners led the way with 18 completed deals, followed by World Insurance Associates with 10 and King Insurance Partners with seven. While insurance heavyweight Arthur J. Gallagher was less active in terms of deal volume, it did ink two of the most significant transactions of the quarter: its proposed acquisition of AssuredPartners and the completed purchase of Woodruff-Sawyer, a San Francisco-based brokerage with estimated revenues of $268 million.

P&C agencies led the way in M&A's

Property and casualty (P&C) agencies made up the lion’s share of sellers—96 deals, or 68% of the total. Agencies focused solely on employee benefits represented just 10% of transactions, while 14 sellers offered a mix of both P&C and benefits services.

The remaining 20 deals involved firms in related sectors, such as third-party administrators, managing general agents, or businesses with ties to life insurance, investment, or financial consulting.

Despite the quarterly slowdown, OPTIS managing partner Timothy Cunningham believes the second half of the year may be defined by blockbuster activity.

“Several private equity-backed firms are preparing to sell or recapitalize,” Cunningham said. “And we expect more large, privately owned agencies to come to market as well.”

That trend may already be underway: the Woodruff-Sawyer sale is among the largest in recent memory and may signal an uptick in headline-making deals.

That jibes with other reviews that the industry posted its third-most active M&A year on record in 2024. All told, there were 847 announced transactions in the U.S. last year — up 5% from 2023, according to Marshberry’s latest report.

As economic conditions stabilize and interest rates settle, the pace of dealmaking could accelerate even more—especially if sellers sense the return of favorable valuations.

The full first-quarter M&A report from Optis Partners is available at optisins.com.

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].