‘New Normal’ as Pace of Insurance Agency M&A Becomes Evident

In the second quarter of 2025, insurance agency mergers and acquisitions saw an 11% increase compared to the previous quarter. However, the overall M&A activity for the first half of this year is down by 8% when compared to last year. OPTIS Partners highlighted these trends in their recent report, showing that there were 319 deals in the U.S. and Canada by June 30, putting the pace at 758 deals for the latest trailing 12 months. Steve Germundson, a partner at OPTIS Partners, referred to this range of 750-800 deals annually as the “new normal.”

Germundson mentioned that moving forward, larger firms will aim for more substantial transactions to drive necessary growth, resulting in fewer buyers as previous active buyers transition into becoming sellers. The report also revealed that out of the 319 deals, 305 were from U.S. agencies, with the remaining 14 transactions originating from Canadian brokers. The primary sellers in the property/casualty insurance space accounted for 209 of these transactions, with OPTIS tracking four types of sellers, including those offering both P/C and employee benefits, employee benefits agencies, and other sellers.

The report also predicts that more large privately-owned agencies are likely to be sold in 2025. Private equity-backed and hybrid brokers have been dominating the deal activity, with 73% of transactions in the first half of this year coming from this group. Timothy J. Cunningham, the managing partner at OPTIS, mentioned that since the beginning of the pandemic, this group has consistently completed around 70% of total deals each quarter. Their financial capacity and willingness to invest in suitable acquisitions contribute to this trend.

Among the private equity-backed and hybrid brokers, BroadStreet Partners led the group with 39 deals in the first half of the year, followed by Hub International with 27 deals, and Inszone Insurance Services with 18 deals. Privately held brokers completed 62 acquisitions, while publicly held brokers reported 19 deals during the same period. This data indicates a significant presence of private equity-backed brokers in the insurance agency M&A landscape.

In conclusion, while the overall M&A activity has seen a decline in the first half of 2025 compared to the previous year, the report from OPTIS Partners suggests that the industry is settling into a “new normal” range of 750-800 deals annually. Private equity-backed and hybrid brokers remain active in driving the transaction volume, showcasing their financial strength and appetite for strategic acquisitions.