Insurance Agency M&A Slows as Buyers Become More Selective

• By: AnneMarie McPherson Spears
• July 29, 2026

Insurance agency mergers and acquisitions activity continued to slow in the first half of 2026, with 292 transactions, according to OPTIS Partners, an investment banking and financial consulting firm specializing in the insurance distribution industry.

The rate of M&A in the first half of 2026 was down 15% from the first half of 2025, marking the slowest start to a year since 2016. These results point to a more disciplined M&A environment in which buyers are pursuing fewer deals but remaining highly competitive for agencies that can demonstrate strong fundamentals, clear growth prospects and strategic fit.

Private equity-backed and hybrid buyers continued to account for the bulk of transactions. OPTIS Partners reported that private equity-backed buyers represented 76% of all acquisitions in the first half of 2026. BroadStreet Partners and Inszone Insurance Services remained the most active buyers, with 37 and 33 deals respectively.

At the same time, some historically active acquirers have cut their acquisition activity by more than 50%. This includes Hub International, Keystone Agency Partners, HighStreet Partners and Acrisure.

“Several of the big, most active buyers over the past several years have significantly cut back activity,” said Steve Germundson, a partner of the firm. “But the buying pace has increased for emerging private equity firms and those anticipating a recapitalization or sale in the near future.”

The pullback reflects a more selective buying environment, according to MarshBerry’s “Q2 2026 Insurance Brokerage M&A Market Update for the U.S.”

“A more hawkish interest-rate outlook, slower organic growth, and heightened macro uncertainty are making buyers more selective—but high-quality insurance brokerages, with demonstrated growth strategies, remain among the most sought-after assets in the middle market,” MarshBerry’s report said. Insurance brokerages continue to fit private equity’s preferred target profile because of their recurring commission revenue, strong cash flow and historically attractive margins.

The result is a bifurcated market: deal volume remains below peak levels, but buyer appetite for high-quality acquisitions remains strong. In particular, buyers are emphasizing growth as a differentiator as premium increases cool and organic growth becomes harder to generate, the report said. Brokerages that can demonstrate consistent organic growth, specialty capabilities, niche market leadership, talent retention, client stickiness and new business production are likely to continue to command premium valuations.

Valuations remain strong for high-performing firms. MarshBerry reported that valuations as a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization) on an up-front base purchase price averaged 11.57x across all firms at the end of the second quarter of 2026, with potential total enterprise value reaching up to 14.61x when maximum earnouts are achieved. Valuation multiples for high-performing firms averaged 14.22x on an upfront base purchase price, with potential total enterprise value up to 17.45x.

“Despite this challenging environment, we see valuations remaining high for larger, well-run firms and softening some for others,” said Tim Cunningham, managing partner at OPTIS Partners.

“Agency owners considering a sale of their business sometime in the next five years should develop a plan now and start taking the necessary steps that will maximize agency value,” Germundson said.

AnneMarie McPherson Spears is IA news editor.