But every tide eventually turns. And the brokerage sector is beginning to feel the undertow.
Organic Growth Slows, M&A Cools
Interest rates are no longer the bargain they once were. The cost of capital is climbing, and liquidity isn’t as easy to come by. M&A deal activity dropped nearly 30% in the first eight months of 2024, a dramatic slowdown compared to 2023.
Meanwhile, organic growth is losing steam as P&C rate hikes flatten. Brokerages that once relied on rate-driven revenue are facing the reality that they can’t grow by pricing power alone anymore.
M&A still matters, of course—it remains one of the sharpest tools for brokers to hold negotiating power with insurers. But the bar is higher than ever. Private equity firms now expect scale, sophistication, and operational discipline, not just growth on paper. The top 100 PE-backed brokerages have nearly doubled their revenue in four years, and the next phase will demand even more complex, integrated organizations to deliver the liquidity events investors crave.
The essential question emerges: when the easy tailwinds fade, how do brokerages keep growing profitably?
The New Growth Playbook
Progressive brokerages are starting to pivot. Here are the strategies that are already separating survivors from leaders.
1.Integration and Standardization: The Backbone of Scale
For years, many brokerages operated like patchwork quilts—collections of local agencies bound by brand but not by process. That federated model may have worked in times of plenty, but in today’s market it breeds waste: redundant tech stacks, inconsistent workflows, siloed data, and weak governance.
The future belongs to firms that act less like holding companies and more like operationally unified enterprises. That means:
Centralizing data flows to build a single source of truth.
Standardizing technology to eliminate duplication.
Consolidating back-office functions finance, HR, claims intake where efficiencies compound.
When brokerages integrate effectively, margins improve, procurement gets smarter, and leaders gain visibility that allows them to steer by data rather than instinct.
2.Finding Growth Beyond M&A
As deals become scarcer, brokers must cultivate new growth avenues:
Generative AI as a sales engine.
Investing in specialized expertise. Entering new verticals or building depth in niche industries can open doors that size alone cannot.
Expanding wholesale and specialty. The E&S (excess and surplus) market is booming, offering brokers fresh revenue streams in complex lines.
In the next chapter, differentiation won’t come from being the biggest—it will come from being indispensable in the sectors you know best.
3.Rethinking Talent for Transformation
The brokerage industry has long celebrated rainmakers—producers who can sell. But in this new era, brokerages need more than salesmanship. They need operators.
Leaders who can:
Unify disparate systems and teams.
Navigate structural transformation.
Leverage data science and digital tools.
Deliver long-term value across the enterprise.
This requires filling gaps in operational leadership, analytics, and transformational management talent that’s still scarce in many firms built on federated models.
Four Quick Wins for Brokerages Right Now
Big transformations take time. But brokerages don’t have to wait years to start creating value. Here are four pragmatic, immediate moves:
Standardize a few processes. Pick low-risk functions like vendor payables or AMS workflows and harmonize them across offices.
Recalibrate your M&A lens. Ensure every deal ties to a long-term strategy, and don’t hesitate to shed non-core assets.
Audit your data ecosystem. Map out where reporting is broken and where systems don’t connect fixing this pays compounding dividends.
Identify talent gaps. Acknowledge the expertise you don’t have yet and plan how you’ll acquire it.
Final Thoughts: Writing the Next Chapter
But the next phase isn’t about decline, it’s about reinvention.
The brokerages that will thrive aren’t the ones that simply coast on past momentum. They’re the ones willing to streamline operations, embrace new technologies, invest in transformative talent, and rethink what “growth” really means.
