In a significant shift within the insurance landscape, a recent survey from Travelers reveals that nearly one-third of companies change their insurance brokers or carriers following mergers and acquisitions. This trend comes at a time when deal-making is booming again in 2025, as businesses reassess their insurance needs in light of new operations and risks.
The survey found that 31% of companies opted for new insurance arrangements after their deals closed. Joann Balous, vice president of sales and marketing for national accounts at Travelers, noted that this change isn’t always due to dissatisfaction with previous brokers. Instead, it often results from new ownership dynamics and evolving company strategies.
Balous expressed concern over the statistic, emphasizing that the churn of brokers and carriers after mergers is unsettling for the insurance industry. She explained that as companies undergo these significant changes, their insurance needs can shift dramatically, prompting them to seek new coverage options that better fit their updated risk profiles.
Interestingly, the survey also highlighted a positive outcome: 95% of business leaders reported that their organizations’ risk management practices improved as a result of the merger or acquisition. About 32% of companies modified or added new insurance policies post-transaction, indicating a proactive approach to risk assessment during these transitions.
The average deal size in 2024 reached approximately $792 million, underscoring the pressure on companies to scrutinize every aspect of their operations, including insurance. Balous pointed out that new financial buyers often drive these changes, pushing companies to reevaluate their insurance relationships and coverage.
Moreover, the survey indicated that 23% of companies hired new risk managers after their transactions. This shift can be attributed to the growing size and complexity of firms, necessitating dedicated professionals to manage risk and maintain relationships with brokers and carriers.
To mitigate the risk of losing clients during these transitions, Balous urged brokers to become involved early in the M&A process. By participating in due diligence, brokers can help identify potential risks and ensure that coverage needs are met effectively. She stressed the importance of communication, advising brokers to maintain open discussions about risk and adapt to new coverage requirements.
Despite the challenges, Balous believes that brokers can minimize disruption for their clients by acting as trusted advisors rather than just salespeople. By staying informed and facilitating early conversations with carriers, brokers can play a crucial role in helping companies navigate the post-M&A landscape.
This evolving scenario highlights the importance of adaptability in the insurance industry, as companies and brokers alike respond to the shifting dynamics brought on by mergers and acquisitions.