MarshBerry’s 2024 UK Insurance Distribution Market Report indicates a record-setting year for mergers and acquisitions (M&A) in the sector, with 152 announced transactions and a total deal value of £4.1 billion, closely mirroring 2023.
According to the report, the market saw a high volume of smaller deals, while commercial lines broking transactions declined as consolidators faced fewer acquisition opportunities. The average deal size remained below the long-term trend due to a limited supply of mid-sized targets.
The list of the most active acquirers continued to change, with last year’s top buyers differing from the previous year. Some historically dominant firms shifted focus overseas, affecting their domestic ranking.
Large UK consolidators also increased European and overseas expansion efforts, the report said. Firms such as PIB Group, Howden and Ardonagh led this trend, followed by Brown & Brown (Europe) and Specialist Risk.
Mid-sized consolidators were divided between pursuing European opportunities and focusing solely on domestic growth. Many large consolidators broadened their capabilities beyond corporate Property & Casualty (P&C) broking, investing in managing general agents (MGAs), health insurance and employee benefits. These acquisitions expanded service offerings and provided cost-effective M&A opportunities.
Private equity (PE) investment trends also shifted, according to the report. Five new primary PE investments occurred in 2024, the highest since 2021, though none involved commercial brokers. Investors showed greater interest in personal lines businesses, where they saw opportunities for higher returns. The number of PE exits exceeded new investments for the fifth consecutive year, reducing the presence of PE-backed groups in the sector.
Meanwhile, personal lines transactions reached a record 29 deals, accounting for 19% of total M&A. Unlike commercial broking, no single consolidator dominated the market, with 27 different buyers involved. Personal lines businesses attracted diverse acquirers, including PE firms and consumer-focused companies, MarshBerry said.
Overseas buyers remained active, with foreign acquirers accounting for 30 transactions, or 20% of UK deals. Buyers from five countries, including the US, Australia, and France, participated in acquisitions. While some new entrants made acquisitions, no large-scale deals occurred in 2024, though MarshBerry anticipates this may change in the coming years.
Major overseas acquisitions also affected UK M&A, including Gallagher’s purchase of AssuredPartners and Ardonagh’s acquisition of PSC. These firms had previously acquired multiple UK brokers, reducing the pool of potential buyers for mid-sized targets. Deal valuations remained high, but pricing disparities widened between top-tier and lower-quality firms. Businesses with strong margins and growth potential commanded premiums, while lower-margin firms faced discounts.
Looking ahead, MarshBerry said that market conditions are unlikely to drive overall valuation increases in 2025, but well-positioned firms may still secure favourable pricing.
MarshBerry recently released data showing that the UK M&A market saw a subdued start to 2025, with only three deals announced in January.
