Deals for insurance firms down 40% over previous five-year average
The slowdown in insurance agency M&A activity across the country continues into the third quarter of 2026, according to the latest data from the investment banking and financial consulting firm OPTIS Partners.
The overall pace of mergers and acquisitions activity is down 40% from the previous five-year average, with the year-over-year decline at 27%.
“Deal flow to date in 2026 is slower than we anticipated. Based on conversations we’ve had and historical trends, we expect Q4 to pick up somewhat but still at a slower pace than prior year-end quarters,” said Steve Germundson, a partner of the firm.
As for numbers, there were 439 insurance agency acquisition announcements from January through September, representing a 19% reduction as compared to the first three quarters of 2025. In Q3-2026 alone, 144 transactions were announced, 27% less than the 197 recorded during the same time period last year. This number, however, represented a slight uptick of 3% as compared to the 140 announced acquisitions in the second quarter of this year.
Private-equity-backed firms top buyers
Buyers are grouped into four categories and then tracked. These include private-equity-backed/hybrid buyers (including certain brokers and institutional investors such as family offices, pension funds, and sovereign wealth funds), privately held brokers, publicly held brokers, and all others.
As in past editions of this report, PE/hybrid buyers accounted for the majority of transactions, representing 76% of all acquisitions in both Q3 and the year-to-date period.
Over the past four quarters, the most active buyers were:
- BroadStreet Partners, with 69 reported deals, 16% above its previous five-year average.
- Inszone Insurance Services, with 59 reported deals, 53% above its previous five-year average.
- Hub International, with 33 reported deals, 46% below its previous five-year average.
Although Gallagher, Brown & Brown, and Aon completed fewer acquisitions, they have focused on acquiring large private-equity-backed firms to enter or strengthen their positions in the middle market, according to OPTIS Managing Partner Tim Cunningham.
“Most of the private equity-backed platforms still want to make acquisitions but are facing pressure to prioritize deleveraging, integration, and exits over sheer volume. This pulls deal counts down even as capital commitments stay high,” he said.
P&C agencies were main sellers
Sellers are also placed in four categories: property/casualty agencies, employee benefits agencies, combination P&C/benefits agencies, and all others. The latter includes TPAs and MGAs; agencies solely focused on life insurance, investment, or financial management or consulting; and other insurance-distribution businesses.
P&C sellers accounted for 292 transactions (67% of the total), P&C/benefits agencies sales totaled 38 (9%), and there were 46 sales of benefits agencies (10%). All other sellers accounted for 63 deals (14%).
Sellers face a more competitive market
“Valuations of agencies with producer-led organic growth, strong benefits books or specialty niches should continue to hold steady,” Cunningham said. “Agencies whose growth came mainly from rate increases will see lower multiples and larger earnouts. If public broker multiples stay depressed, deal pricing is likely to adjust downward.”
Germundson added: “As buyers continue to scrutinize their acquisition targets more closely, it’s ever more important for agency owners who are planning to sell in the next few years to start taking concrete steps now to make their agency a more attractive target.”
The full report can be read at https://optisins.com/wp/2026/10/q3-2026-ma-report/.
More About OPTIS Partners
Focused exclusively on the insurance-distribution marketplace, Minneapolis-based OPTIS Partners (www.optisins.com) offers merger & acquisition representation for sellers and buyers. It also provides appraisals of fair market value; financial performance review, including trend analysis and internal controls; and ownership transition and perpetuation planni
