Slowest first-half acquisition pace since 2016, while P&C agencies account for 68% of sellers
Insurance agency merger and acquisition activity declined 15% during the first half of 2026, according to the latest OPTIS Partners M&A quarterly report. Compared with the same period last year, however, there were only 292 announced transactions, down from 342 in 2025, showing a significant year-over-year slowdown. This amount was also 24% lower than the previous five-year average.
“The pace of M&A activity slowed significantly in the first half of 2026 versus 2025, but the downward trend is likely near the bottom,” noted OPTIS Partners in announcing the latest results. Each quarter, OPTIS Partners looks at merger and acquisition activity in both the United States and Canadian insurance industries.
Overall, the first half of 2026 marked the slowest start for insurance agency M&A since 2016, according to the firm’s database. Despite the decline in deal volume, the firm said valuations remain high for larger, well-run agencies, while valuations have softened for other firms.
Several Major Buyers Cut Acquisition Activity
The main part of the slowdown was attributed to reduced activity among several buyers that had been among the industry’s most active acquirers.
“Several of the big, most active buyers over the past several years have significantly cut back activity,” said Steve Germundson, a partner at OPTIS. “But the buying pace has increased for emerging private equity firms and those anticipating a recapitalization or sale in the near future.”
Among the most active buyers during the first half of 2025, Hub International, Keystone Agency Partners, HighStreet Partners and Acrisure each reduced their acquisition activity by more than 50% during the first half of 2026, the report noted.
At the same time, 68 unique buyers completed or announced transactions during the first six months of the year. Thirty-seven were private-equity-backed buyers, including six that announced their first acquisition. Another 21 were privately held buyers, nine of which entered the acquisition market for the first time.
Private-Equity-Backed Firms Account for 76% of M&A Deals
Private-equity-backed and hybrid buyers continued to dominate agency M&A, accounting for 76% of acquisitions during the first half.
Within this group, BroadStreet Partners led buyers with 37 acquisitions, followed by Inszone Insurance Services with 33. ALKEME and World Insurance Associates each reported 15 transactions.
For its quarterly report, OPTIS Partners includes brokers as well as institutional investors such as family offices, pension funds, and sovereign wealth funds in its private-equity-backed/hybrid buyer category. Its other buyer classifications are privately held brokers, publicly held brokers, and all other buyers.
P&C Agencies Represent 68% of Sellers
Property and Casualty agencies represented the largest share of sellers over the six-month period, accounting for 198 transactions, or 68% of the total.
Another 25 transactions, or 9% of the total, involved agencies combining P&C and employee benefits operations, while employee benefits agencies accounted for 31 sales, or 11%.
OPTIS classified the remaining 38 transactions, or 13%, as “all other” sellers. That category includes TPAs and MGAs; agencies focused solely on life insurance, investment or financial management or consulting; and other insurance distribution businesses.
OPTIS Sees High Valuations Continuing for Top Agencies
Although overall acquisition activity has slowed, OPTIS Partners emphasized that market conditions continue to favor larger, higher-performing agencies.
“Despite this challenging environment, we see valuations remaining high for larger, well-run firms and softening some for others,” said OPTIS Managing Partner Tim Cunningham.
While there are currently fewer sellers in the market, particularly high-quality agencies, Cunningham explained, a large number of agencies, primarily smaller firms without the ability to perpetuate ownership internally, are expected to be sold over the next five to 10 years.
Germundson said agency principals contemplating a transaction should begin preparing well before an anticipated sale.
“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,” he said.
For those interested in reading the full OPTIS Partners first-half 2026 M&A report, it can be accessed on their website here.
