2026 Outlook
Could 2026 Be a Transitional Year for Insurance Brokerage?
The insurance brokerage industry entered 2026 with a blend of cautious optimism and continued structural strength. After a volatile 2025 marked by shifting insurance rate cycles, declining public broker valuations, and macroeconomic uncertainty, the sector has nevertheless demonstrated resilience – particularly in M&A activity and private‑market valuations. However, 2026 has the potential to be a transitional year for insurance brokers. As the rate environment shifts, brokers – many who have only experienced the beneficial tailwinds of premium rate increases and limited capacity – may now feel the impact that flat or declining rates and broader capacity will have on their organic growth.
M&A momentum in this sector is expected to continue, as the demand for quality firms still outpaces supply. Private capital-backed buyers remain a dominant catalyst – supported by plenty of dry powder, declining capital costs, and the need for inorganic growth.
Valuation multiples for high-quality and top-tier platform firms are expected to remain strong in 2026, as specialization and niche expertise are increasingly driving premium pricing. With interest rates expected to ease further, competition for scarce high‑performing assets may intensify, especially among PE‑backed consolidators nearing the end of investment cycles and preparing for recapitalizations, secondary sales, or IPO considerations.
The future of the independent broker
For independent brokers – focus needs to be on how to grow without reliance on rate and market exposure. To do that, better client offerings remain a key theme. The end client continues to demand more from their brokerage and access to industry (niche) expertise, data and analytics, loss control and claims services, or even broader solutions (e.g., human resources consulting, retirement planning, individual wealth) – which are becoming a cost of entry to remain competitive. Independent firms are weighing their options as to whether they need to build these services on their own or partner with one of the 40+ well capitalized buyers in the marketplace that has already made the investments. Layer all of these client expectations on top of the deluge of headlines on how AI is moving closer to the point of sale in the insurance brokerage chain – and the pressure is mounting on independent firms. Headlines about AI are not going away, but eventually we will see what is true and what is speculation. MarshBerry doesn’t believe this is the moment when insurance brokers start to become obsolete. In fact, it may be the opposite. This may be the moment that brokers recognize the benefits that AI offers them to create efficiencies in their business processes, providing early adopters with clear competitive advantages. The need to lean into technology to enable more intelligent and efficient brokers will likely drive more independent firms to seek a strategic partner. The process of evaluating a long‑term strategic direction has become increasingly complex for independent firms. If a firm is not committed to continual double digit organic growth even in a softening rate environment, they will have a tough time keeping up with the current high valuations that others are getting. Some firms will be investing heavily in people and technology – looking towards building for continued long-term independence. Others will decide to find a partner that can help them elevate their business to the next level. In either case, this won’t be the year for independent brokers to sit back and watch – as 2026 will likely be a year defined by a need to take action. MarshBerry is here to help you navigate the numerous options in front of you.
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