BMO Insurance Distribution Forum Recap and Themes to Watch in 2025

As the leading insurance distribution executives and private equity investors descended on the Beverly Hills Four Seasons, one theme was certain: the next 12-24 months will look nothing like the past five years. Every year, the BMO Insurance Distribution Forum gathers leaders from some of the largest insurance brokerage and private equity firms in the same room to network and engage in thought-provoking panel discussions.  

Several themes came out of the event as impacting the brokerage industry in 2025 (and beyond), but growth outlook is first and foremost, and the past is not necessarily prologue. Growth will be the most intensely examined theme in this “new normal” organic growth environment and shift to more disciplined M&A (in a market that remains ultra-competitive). As one executive put it, “Organic growth is the lifeblood of this industry.” Management teams are focused on how to take market share from their competition and what gives them the “right to win.” M&A pipelines are being heavily scrutinized, while platforms focus inward on organic growth initiatives, expense rationalization and integration. Differentiation in value proposition, technology investments, and the path to liquidity will round out the themes impacting 2025.  

From an organic growth standpoint, the macro backdrop for brokers remains favorable to sustain above long-term averages. However, organic growth has been decelerating versus the levels seen in 2023. This “new normal” will depend on the offsetting dynamics highlighted across property (decelerating) and casualty (accelerating) against a backdrop of macro rate stability. 

On the M&A side of the growth equation, we witnessed shifting market dynamics in 2024, which led to larger transactions for the publics and a slowdown in overall deal pace. Broker deal pace was relatively muted, largely due to a lower volume of deals from PE-backed buyers (a total of 535 U.S. deals versus 771 in 2023 and compared to the 1,161 peak in 2021). However, we’ve now seen each of the “Big 3” public brokers acquire large PE-backed platforms, with the expectation of more deal activity from the large publics and PE-backed platform exits in 2025. As one executive of a large public broker communicated, “We’re in inning 3” as it relates to the consolidation of the consolidators. 

We see a few themes as having emerged in brokerage M&A:  

1. Both management teams and investors are more disciplined around the acquisition opportunities they decide to pursue (both tuck-in and new platforms);  

2. the M&A engine alone has become table stakes – the market now sees value in a differentiated M&A approach; and  

3. valuations for assets viewed as “best-in-class,” either platform or tuck-in, have not softened, and competition is fierce. We’re witnessing more of a spread between the “haves” (tracking record of organic growth and integration) and “have-nots” (lacking organic growth and integration). The drastic differential in valuation outcomes of the Aon / NFP transaction vs. the AJG / Assured transaction has forced management teams and investors to look into the mirror – organic growth and integration are staring back. 

All said, the question on everyone’s mind continues to be when the carry-on effect from large cap valuations (appear to be softening) will inform small cap deals. 

Defining, articulating, differentiating, and defending your value proposition is top of mind regardless of bull vs. bear market, or hard vs. soft insurance cycle. However, as we sit here today, ~45% of the top 50 U.S. brokers are PE-backed (either majority or minority), with the remainder being either public or privately owned by management and employees. As a result, management teams and sponsors remain keenly focused on differentiation, seeking answers to key questions such as: How and why are you taking market share from your competitors? Why are you attracting and retaining your clients and producers? As the Head of M&A at a large cap broker stated, “Sellers are now asking the question, what are you going to do for me to make me a better business?”   

The continued focus on value proposition differentiation, whether demonstrated through organic growth performance, industry and/or product specialization, technology enablement, M&A strategy, and integration, will continue to be top of mind in 2025 and beyond. On the topic of integration, one CEO eloquently articulated “It’s known by no one and owned by everyone … If it creates value and reduces risk, it’s worth doing…Brokerages are people-based businesses where you’re either growing or dying. Putting energy (via integration) into driving additional revenue growth and making folks more successful is a win for everyone.” Using technology to “identify opportunities that humans can’t see at scale” is the focus of Greg Williams, Founder and CEO of Acrisure. As Greg highlighted during his fireside chat with BMO Capital Markets CEO and Group Head, Alan Tannenbaum, “The ability to provide insights, recommendations and align Acrisure’s product and service offering to fit what their client wants and needs and not what Acrisure is willing to sell” is their focus, and in my view, value proposition differentiator. Greg quoted 98% client retention when Acrisure is placing three or more products with a client.  

Again, those who define, articulate, and demonstrate their value proposition clearly will continue to command a premium in the market. 

Various sources have highlighted up to $200 billion of “trapped capital” currently invested in the insurance brokerage ecosystem. This is a staggering number versus the number of sponsors invested in the sector 15 years ago. There are now 17 PE-backed platforms with more than $1 billion in revenue (also a staggering number). Given the number of sponsors with the ability to pay, and without an investment in the space getting smaller and smaller, how will the path to liquidity develop? For starters, we’ll continue to see methods such as continuation vehicles, structured equity, and minority stake sales continue to play out; however, given the sheer magnitude of trapped capital and number of $1 billion-plus platforms, a number of themes are likely to emerge:  

1. Emergence of IPOs (see Jeff Vickers’s note on equity capital markets expectations);  

2. sponsors potentially taking a haircut to provide liquidity to their shareholders; 

3. more sponsors invested in several brokerage assets;  

4. increased sovereign wealth and pension activity; and  

5. larger and more complex consolidation among the consolidators.  

Again, the past is not necessarily prologue. 2025 will hold new avenues for liquidity for management teams and sponsors, increased strategic activity (maybe even cross border into the U.S. or vice versa), and an intense focus on platform differentiation. Alternative distribution models (though not necessarily new), such as personal lines (off the back of the successful IPO of TWFG) and network models, are gaining more focus and attention from investors. When asked about their headline predictions for 2025, the M&A panel responded with more IPOs in the sector (maybe even a failed attempt) as well as continued consolidation of the consolidators; perhaps Brown & Brown and/or Willis will find their opportunity. With that backdrop, I expect 2025 to be a busy one.