Insurance broker consolidation continues – but is growth harder to find?

After years of rapid expansion fueled by rising premiums, strong client demand and a wave of consolidation, insurance brokers are entering a more complex growth environment.

In the US alone, brokerage M&A activity reached 847 announced transactions in 2024, the third-highest total on record, according to industry advisory firm MarshBerry. Dealmaking remained robust into 2025, with more than 649 transactions announced by November, although the pace has started to cool compared with the previous year’s peak.

But for mid-sized insurance brokers, the biggest challenge may not be deal financing or valuations; it may be finding meaningful organic growth.

That's the view of Kevin Callister (pictured), chief affiliations officer at Leavitt Group, who said the broader brokerage sector is feeling the strain after several years of unusually strong expansion.

“Organic growth is suffering a bit in the industry as a whole,” Callister said. “It’s not the same as it’s been over the last few years where everybody was organically growing.”

The shift is creating ripple effects across the M&A landscape, as buyers compete for agencies that can still demonstrate strong underlying growth.

“We want to partner with agencies that are organically growing,” continued Callister. “If you can find those, they’re worth paying up for, but they’re not as easy to find in today’s market.”

That dynamic is shaping how Leavitt Group approaches acquisitions as it continues to expand in an increasingly competitive brokerage consolidation market.

The Utah-based brokerage has remained an active buyer, standing out last year as one of the few privately held firms to rank among the top 10 most active acquirers. Many of its competitors are private equity-backed platforms that have dominated dealmaking across the industry.

According to Callister, the company’s ownership model has helped it differentiate itself when pursuing acquisition targets. Unlike some consolidators that require agency owners to sell outright, Leavitt Group allows sellers to retain equity and remain actively involved in the business.

“Often, sellers don’t have to sell completely out in the sales process, and they have the ability to remain active in the business and continue to build wealth through their equity and the involvement that they retain moving forward,” Callister said.

While that structure does not appeal to every seller, it resonates strongly with agency owners focused on long-term continuity. “There’s a segment of the industry that absolutely loves the model and loves the culture that we employ,” Callister said. “It seems to be refreshing for them.”

One example of the firm’s evolving strategy is its recent affiliation with FBMC Benefits Management, which strengthens its employee benefits capabilities. The deal reflects the growing role employee benefits plays in the brokerage’s overall business mix.

“With them, about 25% of our revenue now comes from the employee benefits side of the industry,” Callister said. “P&C is the other close to 75%.”

FBMC also brings additional technology and voluntary benefits capabilities that complement the firm’s existing offerings, he added.

Beyond benefits, Leavitt Group is exploring other avenues for growth, including expansion into alternative risk markets such as captives, which are attracting businesses seeking greater control over insurance costs.

Geographic expansion is also on the agenda. The Midwest is emerging as a priority region for future affiliations, according to Callister.

The firm is also evaluating opportunities in specialty distribution channels, including potential entry into wholesale brokerage.

“From a specialization standpoint, the wholesale market might be an area that we venture into,” he said.

While organic growth pressures are affecting the industry, the financing environment for acquisitions has also tightened as higher interest rates raise borrowing costs.

However, Callister said Leavitt Group’s conservative approach to leverage has helped the company remain active.

“Part of the reason why we haven’t had to bear down like many of the others have is because we’ve been very disciplined in our leverage approach in the past,” he told Insurance Business.

Where some consolidators have historically used leverage ratios of five to seven times earnings, he said Leavitt Group maintains internal limits well below those levels. “We’ve got our own speed bumps in place that we maintain much lower than that,” Callister said. “It helps us in markets like this, when others need to scale back a little bit, we’re able to continue on with our acquisition strategy.”

Pricing discipline has also remained largely consistent despite competition from private equity-backed buyers.

“We may not be the highest (bidder),” Callister said. “But when you’re competitive, and you have the ability to bring those (value) adds to the table, it plays quite well.”

Despite the slowdown in organic growth across the sector, Callister said the firm remains confident about the long-term prospects for the brokerage industry. Deal flow will likely remain steady, though the number and size of transactions may fluctuate with market conditions.

Even with near-term challenges, Callister believes the fundamentals of the brokerage model remain strong. “We’re aggressive, we’re excited, and we’re optimistic,” he said. “This business is our core, and we plan for that to continue well into the future.”