Opinion: The changing face of the broker market as firms take stock of M&A options

By Katie Scott

Word on the Square Mile is that highly acquisitive brokers are pressing pause in 2025, slowing down the previous rapid-fire pace of M&A to focus on integration work and making fewer, but larger deals.

One such example here would be US-headquartered broker Brown and Brown, which is in the midst of a UK rebrand project as I write this column.

In terms of what these fewer, but larger deals could look like, however, has the era of consolidators looking to buy other consolidators finally come to fruition after much speculation?

These predictions probably kickstarted in 2020, when Aon and WTW first attempted to merge, but December 2024’s announcement flagging Gallagher’s purchase of AssuredPartners has added fuel to this fire amid commentator whisperings that M&A targets in the UK are drying up.

For Peter Blanc, global head of M&A at Howden, the consolidation of consolidators in the UK is a real possibility moving forward as a vast majority of mid-market brokers – those with £5m or more of revenue – have been snapped up by what he described as “the previous generation of consolidators”, including PIB Group, Global Risk Partners, The Ardonagh Group and, of course, Blanc’s former stomping ground Aston Lark.

Nowadays, Blanc sees “a vibrant market” of very small brokers, which Howden, JMG Group, Jensten Group and The Clear Group are all shopping from. However, he added that “there is a notable lack of volume available”, which is “driving high prices for these deals” – especially where private equity investors are demanding “a flow of acquisitions” due to placing “significant” value on scale.

Blanc continued: “For the larger brokers, there is now the tantalising prospect of acquiring some of the current generation of consolidators. There is huge strategic interest in quality brokers of scale.”

Olly Laughton-Scott, managing director at MarshBerry UK, questioned whether “medium size consolidators [will] sell to other consolidators or trade buyers like Aon or Gallagher”.

He added: “If private equity firms believe that the supply of smaller firms is drying up, then the prices they will offer will not match what trade buyers can pay.”

With the consensus among experts being that the broking mid-market has all but disappeared, this presents an opportunity for small brokers to grow and fill the void. Equally, if large brokers and consolidators also focus on buying each other, then there is time and space for a new raft of startup brokers to join UKGI.

Laughton-Scott noted that he is seeing a lot of MGAs setting up shop, for example.

Michael Sicsic, managing partner at Sicsic Advisory, told me that the quickest way for new brokers to start trading is to adopt the appointed representative (AR) model, typically in conjunction with a broker network. He added that this approach is a good way of finding talent, which subsequently leads to AR businesses being acquired – a “cycle” he is increasingly seeing.

As we dive into 2025, it looks as though broker M&A may finally slow down in the UK. But, the opportunities for internationalisation and startups means the current lay of the land will likely not remain the same for long.