Top 50 Brokers: Best strategic fit will win the day in broking M&A

Over the past 25 years, the insurance broking industry has seen a dramatic transformation – mostly thanks to global economic expansion and an elongated hard market environment.

Contributing to this economic expansion has been a wave of consolidation that started in the US. This has now swept across the Atlantic Ocean and into the UK and Europe.

Driving this wave has been the influential force of private equity (PE) or PE-backed buyers – these investors have been behind nearly 70% of all insurance broker M&A transactions regarding firms worth £25m or more in Europe.

But this was not always the case.

Historically, brokers had been seen as a bad risk. Because of this, banks and PE investors were not willing to supply significant risk capital for anything other than the largest transactions – such as KKR taking Willis Corroon private in 1998.

This influx of PE and PE-backed capital that is currently reshaping the general insurance industry was in part driven by a revolution spearheaded by one of the most influential figures in the UK insurance industry – Peter Cullum, who founded Towergate Underwriting Services in 1997.

Cullum played a transformative role in today’s M&A trend when he recognised that the crucial dynamic of the insurance industry had changed – where underwriting capital was no longer king because brokers owned the relationship with clients.

His model – which centred on acquiring undervalued or niche regional brokers and integrating them into larger platforms to leverage centralised operational efficiencies – proved highly attractive to PE firms. This resulted in the economics of the industry moving decisively in the favour of brokers.

Today, this model is further supported by rising valuations and successful exits at ever increasing multiples. However, are we trending towards the belief that all that matters is acquiring earnings? Is the quality and strategic fit between firms playing a poor second fiddle to rationale?

There are certainly plenty of deals with little or no apparent logic, where no attempt is made to integrate two firms with quite different business models.

Supporting synergies

Selling to a PE-backed firm is unlikely to be the ‘forever home’ for most brokers and may simply be a means to an end.

However, selling to the highest bidder when the operational or strategic fit is poor is likely to lead to an unsatisfactory bedfellow. Often when businesses are acquired by a firm with a different operating model, the decision-making processes become protracted and suboptimal.

Arthur J Gallagher’s August 2025 acquisition of AssuredPartners at a low to mid-teens multiple provides a useful reminder that the real value of a business is more than its collective earnings before interest, taxes, depreciation and amortisation (ebitda).

In the long run, cultural and strategic alignment provides a smoother integration and more synergistic value.

In 2023, Imas – an insurance and investment M&A advisory firm headquartered in the UK – sold to US-based MarshBerry because the world of insurance distribution is internationalising. Therefore, MarshBerry was the best strategic fit that would provide the greatest global reach.

This was a transaction that combined the strengths of the two firms, each with expertise in data rich insights and market perspectives, to create a powerhouse of M&A advisory services in the industry.

In September 2025, MarshBerry signed a definitive agreement to join Lincoln International, a global investment banking and financial services firm. The deal completed in November 2025.

Once again, the common thread here is ‘best strategic fit’. MarshBerry will become a key part of Lincoln’s investment banking advisory business, enhancing its financial services sector expertise and reinforcing the firm’s overall position as the advisor of choice for financial services businesses navigating the increasingly complex and evolving M&A landscape.