Agency owners must stay informed about significant new trends in the insurance industry. The following is part one of a two-part article highlighting seven industry trends insurance agencies should track for 2026.
2025 M&A Activity & Pricing
The field of buyers has shifted while the pace of acquisitions has slowed for a few reasons. In some situations, buyers are strategically slowing down. S
ome acquisition activity has been dampened by increased inflation and higher interest rates.
According to OPTIS Partners, “the deal count is down 7% from the same three quarters, now 520 transactions versus 562. For the trailing 4 quarters, deal pace is 7
41.” According to Sica Fletcher, an M&A broker, “the reasons for the slowdown are related to the cost of capital and stable to rising valuations, as well as global economic uneasiness resulting in stricter allocation of capital.”
The prices currently paid by publicly traded brokers, large regionals, and agencies backed by private equity firms remain high. They will remain high for the desirable firms. Since supply is dwindling, prices may be even higher for th
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ose that remain if they fit the profiles of today’s major buyers. Some buyers with weaker balance sheets may be forced to the sidelines if interest rates do not decrease significantly.
Optis Partners reports that “those who picked up the most were Alera Group up 100%, HighStreet Partners up 75%, and King Risk Partners at 53%.”
According to our discussions with key acquirers, M&A activity is expected to continue in 2026, though with some caveats. Here are some of their responses:
HUB added more than 50 merger partners in 2025, according to Clark Wormer, M&A director. “M&A is the foundation of our growth strategy, enabling them to help partners expand their business and unlock new opportunities,” Clark said.
Foundation Risk Partners (FRP) began in November 2017 and is approaching $800 million of annualized revenues by year-end 2025. They do not ann
ounce their transactions but are now among the top 20 largest U.S. independent agency brokers. They made numerous acquisitions this past year and will continue that trend in 2026. FRP is looking for more add-ons and new niches to
spread nationwide. They would especially like to add firms in the Pacific Northwest, Texas, Arizona, the Rockies, and New England. They are also looking to continue building out existing regions, including the Northeast, Southeast, the Midwest, and California.