The announcement of Arthur J. Gallagher’s $13.45 billion acquisition of AssuredPartners signals a transformative moment in the insurance brokerage industry. As John Biasiello noted earlier, this move marks the start of a consolidation wave among large brokers—something Sukay & Associates predicted at the beginning of 2024.
For decades, the insurance industry has evolved through waves of mergers and acquisitions. Starting in the early 1990s, independent agencies began consolidating under larger firms, spurred initially by banks then by private equity (PE) investment. These PE-backed and bank-driven consolidations have since transformed many mid-sized firms into mega-brokers. Now, as these large firms mature, their investors are seeking the next move: cashing out through strategic exits, or sales.
Why This Matters for Agency Owners
The shift toward mega-broker consolidation will impact agency owners of all sizes, but especially those on the smaller end of the revenue spectrum. While this wave of acquisitions brings opportunities for some, it also creates challenges for others.
- Larger Agencies will continue to be in High Demand
Buyers in this phase of consolidation will be primarily targeting agencies with revenues exceeding $5 million. This focus on scale means that smaller agencies may face reduced demand from larger buyers or large buyers will consider them but at a lower multiple. - Smaller Sellers Must Be Strategic
For agencies with revenues under $5 million, finding the right buyer becomes even more critical. While mega-brokers may not be interested, there are still opportunities with the right strategic partner. Smaller agencies will need to position themselves carefully to attract buyers who value their unique strengths, culture, and client relationships. - Valuation Challenges
With private equity driving up competition for larger agencies, smaller firms may find it harder to achieve top-dollar valuations. However, a well-structured and strategic sale can still deliver strong outcomes if handled correctly.
How Sukay & Associates Can Help
At Sukay & Associates, we specialize in helping insurance agency owners navigate complex transitions, no matter their size. With over 30 years of experience, we’ve seen every phase of consolidation—and we know how to position agencies for success in any market.
Here’s how we add value to smaller and mid-sized agencies:
- Industry Expertise: We understand how insurance agencies operate. We know what influences buyers behavior and how to make sure we position your agency in the best light.
- Market Expertise: We know what creates value in all markets and understand the timing and positioning of your agency to be sure we maximize value.
- Strategic Guidance: Finding the right buyer is critical, especially when mega-brokers aren’t interested. We identify buyers who align with your agency’s strengths and values.
- Tailored Solutions: Whether you’re selling to a public broker, regional player, or a private equity buyer, we craft customized strategies that prioritize your goals and legacy.
- Valuation Optimization: Even in a challenging market, we help you maximize the value of your agency through careful positioning and negotiation. Our first goal is to get the best deal but it does not stop there. We want to make sure that you are successful after the transaction and enjoy the balance of your time in the business that you spent every day trying to make better.
Prepare for What’s Next
The Gallagher-AssuredPartners deal is just the beginning of what promises to be a significant period of consolidation. For smaller agency owners, this means proactively preparing for a sale and identifying the right partners is more important than ever.
At Sukay & Associates, we believe every agency has unique value. Our role is to help you uncover it, position it, and achieve a successful outcome—no matter the size of your agency, what your timing is, we want you to know that we will help you through the process.
Don’t wait until you have to make a decision. Take the First Step Now.
The insurance brokerage industry is evolving rapidly. Let Sukay & Associates be your guide in navigating these changes.
Contact us today to discuss your options and learn how we can help you achieve the best possible outcome for your agency. This conversation does not cost you anything but could be the difference down the road when you are ready to take the next step.
Your next move could be your best move—let us help you make it with confidence.
