Insurance Broker Economics: The Carousel of M&As

A shift in strategy now pits the largest brokers against mid-size firms in a battle for the middle market. Driven in part by responses to investigations by then-New York Attorney General Eliot Spitzer, the acquisition strategy of the largest brokers has shifted from vertical integration to one of achieving greater breadth and depth across market segments. At the same time, second tier brokers continue to pursue an aggressive "roll-up" strategy to grow market share in many of the same segments. The insurance brokerage industry has been consolidating for decades, and many more acquisitions certainly are on the horizon. This Advisen report examines the forces driving broker M&A activity, and offers valuable insights into emerging M&A trends.