Opinion: German family owned brokers present next M&A sweet spot for consolidators

Acquisitional growth has been an important undercurrent – or even a lynchpin – in the UK general insurance broker marketplace for many years now. It has certainly been an overriding theme and constant fixture since I joined the sector back in 2019.

Research by FTI Consulting, entitled European insurance M&A barometer report 2024: Surfing the new European wave of consolidation, published in March 2025, confirmed this thesis.

The global management advisory business found that in the UK and Ireland, including Bermuda, insurance M&A deals totalled 284 last year compared to 141 back in 2020. Of these 284 UK and Ireland-based M&A deals, FTI Consulting noted that 259 concerned brokers and service providers.

This volume far exceeded equivalent M&A activity across Europe – the report recorded 117 overall deals in Iberia in 2024, 40 in France and 31 in Italy, for example.

However, herein lies the rub. André Frazão, managing director and head of insurance M&A for Europe, Middle East and Africa (Emea) at FTI Consulting, explained in the report that although the UK and Ireland had previously “lead sector consolidation in the European M&A market, this now mature market is facing an increasing scarcity of targets and limited runway”.

With acquisitional growth still desirable for many UK-based brokers, window shopping by private equity (PE) backers and large consolidation focused firms has moved from British soil to Continental Europe – and, in particular, Germany.

Indeed, FTI Consulting recorded 106 insurance M&A deals across Germany, Austria and Switzerland in 2024 – a vast uptick on the 21 transactions completed in 2020 across this territory. Furthermore, “over 95%” of 2024’s deals were “acquisitions of distribution and service providers”, the report noted.

But why is Germany gaining greater attention from British broker consolidators as the next key M&A destination?

Joining the family tree

The biggest selling point when it comes to completing M&A in the German insurance market is that many of the sector’s firms are currently smaller scale, family owned businesses that may be more open minded to acquisition conversations – akin to the UK’s yesteryear, prior to numerous waves of consolidation that now sees the country’s mid-market rather thinned out and the broker landscape very much top and bottom heavy.

Peter Kelly, senior managing director in the global insurance services practice at FTI Consulting, told me: “In Germany, there are many independent, often family owned brokers of modest size. They are smaller in size, at a stage where they are approachable and open to ownership succession, making them very attractive to prospective international buyers.”

One such buyer that can attest to this mindset is Mike Edgeley, chief executive at The Clear Group.

The broker leader told me at the beginning of 2025 that one pillar of The Clear Group’s six-pronged M&A strategy is a desired expansion into Continental Europe, with the business being “very interested in Germany”.

Edgeley explained: “None can match Germany for [the] size of [the] market opportunity where many smaller brokers remain often second or third generation family owned. We are actively looking for brokers in Germany [to buy].”

Healthy appetite for German opportunities

The types of brokers dominating the German insurance market is not the only driver of UK led M&A in the jurisdiction, Kelly added.

“Operational performance is strong. Brokers are experiencing good profitability and efficiency, with healthy and growing earnings before interest, taxes, depreciation and amortisation (ebitda) margins in a market where overall insurance demand is relatively predictable,” he said.

Edgeley agreed: “Germany attracts both trade and PE acquirers as the next largest European broker market after the UK, but with a longer runway for buy and build growth.

“Rising interest in Germany is the next phase of a consolidation wave that originated in the US before spreading to the UK. [This] is now continuing into Continental Europe.

“European broker consolidation started almost 10 years behind the UK market, but has accelerated to its current red-hot levels far faster. The PE model favours a predictable cadence of value creating M&A – Germany’s fragmented broker market and concentration of insurable industrial assets suits this well.”

FTI Consulting’s aforementioned report showed that Howden Group, Gallagher and Miller had all made purchases across Germany, Austria and Switzerland in 2024, giving a clear indication of the direction of M&A travel between the UK and Germany.

Frazão confirmed: “PE owned broker consolidators [continue] to exploit market fragmentation in Germany in pursuit of their growth strategies. The market expects a new wave of German broker platforms to come to market this year, requiring new funding to support further M&A. [This suggests] that deal volumes will continue to rise.”

And so the M&A treadmill continues, with broker growth strategies expanding beyond British borders to say guten tag to German opportunities.

But what will the resultant impact be on the shape of the UK broker market? Only time will tell whether Germany becomes the UK’s market mirror image or whether all M&A will need an international angle in order to drive sufficient scale.