The insurance merger and acquisition scene is shifting in a big way. Carriers, brokers, and investors are having to rethink their plans as the market changes. David Hitsky, a partner at L.E.K. Consulting and head of its insurance practice, says these shifts come from economic pressures and bigger industry changes that will carry on into 2026.
One big factor is money. Rising interest rates mean loans cost more and private equity funds are harder to come by. Simply put, financing deals isn’t cheap like it used to be. Early in 2025, many expected deal-making to bounce back by midyear, especially with hopes for clearer trade and inflation policies. But that didn’t happen. Hitsky mentions companies getting used to uncertainty but not gaining confidence about what lies ahead.
Data backs this up. Conning’s global insurance M&A review for 2024 showed fewer deals overall compared to the year before. Yet, the total money involved in these deals actually went up, driven by a few headline-grabbing transactions that reshaped parts of the market. PwC reported 209 deals valued at $30 billion happened globally in the six months leading to mid-May 2025. That’s fewer deals than the previous six months but at a higher total value. Deloitte’s outlook confirms the trend: fewer deals overall, but bigger deals pushing the total value up.
Regionally, it’s a mixed bag. UK deal volumes in 2025 have dropped 35% compared to 2024. Still, the third quarter showed some pick-up in certain areas like France, Southern Europe, and the Nordics.
Looking ahead, Hitsky expects this pattern to stick. Fewer transactions, but with more focus on large deals. Many mid-sized companies have already been bought in the last decade, so fewer targets remain in that range. In particular, consolidation is heating up among insurance brokers. MarshBerry reports 847 brokerage deals in 2024, up 5% from the previous year and among the highest ever. This has pushed the value of good mid-sized brokerage businesses higher.
Smaller brokerage deals are becoming less attractive due to costlier financing. Instead, the biggest players focus on growing bigger. They want to cut costs and keep a stronger position when dealing with carriers. Also, buyers aren’t looking just at traditional retail brokers anymore. Managing general agents (MGAs), program administrators, and service businesses are drawing more interest. MGAs are growing fast, handling roughly $150 billion in gross written premiums worldwide in 2024, with $115 billion in the US alone.
Claims services are also a hot area. These “asset-light, cash-generating” firms are gaining attention. For example, the UK’s Davies Group recently agreed to buy Canada’s largest claims processor, SCM Insurance Services, marking its biggest acquisition so far.
On a different note, artificial intelligence (AI) might change everything. Hitsky thinks AI could shake up how insurance companies and brokers work. Today’s system is full of manual processes and many middlemen. AI could streamline this and bring new ways to sell insurance. As customers expect experiences like those from Amazon or Uber, AI might lead to new business models and fresh opportunities for deals.
In short, the insurance M&A market is quieter but bigger deals are still happening. Financing costs and fewer mid-sized options mean the focus is shifting. Meanwhile, AI may open a new chapter for the industry’s future.