The first half of 2025 presented a shifting landscape for mergers and acquisitions (M&A) in the U.S. market. Activity levels showed notable divergence between the independent insurance distribution sector and the broader M&A environment. Below is a summary of the key trends and data points observed from January through June 2025.
Overall M&A Market Overview
U.S. M&A activity slowed significantly in the first half of 2025:
- Total deals across all industries: 3,505 transactions were reported, reflecting a 15% decrease compared to the first half of 2024.
- Middle market deal activity: Transactions in the $25M–$1B range totaled 891, down from 1,010 in the first half of the previous year.
- Enterprise value: Aggregate deal value stood at $387 billion, a decline from $415 billion year-over-year.
Despite the slowdown, private equity remained active, with approximately 60% of all M&A deals involving a private equity buyer or seller.
Independent Insurance Distribution Sector
In contrast to broader market trends, M&A activity in the independent insurance distribution sector remained steady:
- Reported transactions: 267 deals were closed in the first half of 2025, consistent with the 270 deals reported during the same period in 2024.
- Private equity involvement: Around 80% of these deals involved buyers backed by private capital, continuing a trend from previous years.
- Top buyers:
-
- BroadStreet Partners led with 29 transactions.
- Hub International followed with 20 deals.
- Inszone Insurance Services recorded 16 acquisitions.
The top ten most active buyers accounted for approximately 55% of all transactions in the sector during this period.
Market Trends and Strategic Shifts
Several patterns emerged within the insurance distribution M&A landscape:
- Diversification in buyer pool: Smaller and regional brokers increased their acquisition activity, especially in niche and specialty segments.
- Shift in deal sizes: The market saw fewer mega-deals and a rise in small- to mid-sized acquisitions.
- Deal structures: Earn-out provisions and deferred payments continued to be prevalent, as buyers aimed to mitigate perceived market risks.
Cross-Border Activity and International Trends
International M&A involving U.S.-based insurance brokers remained limited:
- Inbound acquisitions: Minimal activity from non-U.S. buyers acquiring U.S. firms.
- Outbound deals: U.S. brokers made selective purchases in Canada, the U.K., and Australia, primarily in line with strategic growth or client service goals.
Outlook for the Second Half of 2025
As of mid-year, analysts and deal advisors observed:
- Stabilizing valuations: Valuation multiples appeared to have normalized, reducing volatility compared to prior periods.
- Pipeline visibility: Deal pipelines for the second half of 2025 remained robust, though many firms are approaching acquisitions cautiously due to economic uncertainties and interest rate considerations.
Source: First Half 2025 Merger & Acquisition Update, July 23, 2025, by Steve Germundson.