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We are delighted to share the ninth report in our Industry Primers series, this one on the global insurance brokerage industry. It follows the industry through London, continental Europe, Australia, India, China and Japan as well as the United States. The series exists to help fundamental, long-term investors expand and deepen their circle of competence, one industry at a time, and your feedback on what was useful and on which industries to cover next shapes what we produce. Two podcast episodes complement the report, the first telling the industry’s story and the second digging deeper into the fundamentals from an investor’s standpoint. The companion slide deck (free to access) and the full research report (members only) follow below.
A broker earns a share of the premium its client pays an insurer and never pays the claim, so it needs little capital. On a US middle-market commercial account the commission is roughly 10 to 15 percent of premium. People are the main cost: compensation and benefits took 50 percent of 2025 revenue at Brown & Brown (NYSE: BRO) and 58 percent at WTW (NASDAQ: WTW), while capital spending ran from 1.1 to 2.4 percent of revenue at the five largest listed brokers. Those five, Marsh & McLennan (NYSE: MRSH; MMC until January 2026), Arthur J. Gallagher & Co. (NYSE: AJG), Aon (NYSE: AON), WTW and Brown & Brown, were worth USD 272bn at the October 21, 2026 close, 84 percent of a listed industry worth about USD 325bn. Their shares trade in New York, and Marsh, Aon and WTW earn about half their brokerage revenue outside the United States.
From 2005 to 2025 two of the five largest brokers beat the S&P 500, and much of the difference came from the price at the start. With dividends reinvested, Gallagher returned 15 times the money, 15 percent a year, and Aon 13 percent a year, against 11 percent for the S&P 500 total-return index, while Marsh compounded at 12 percent, about the market’s rate. Brown & Brown returned minus 3.6 percent a year over the five years from the end of 2005, when its shares were priced for the hard market of 2001 to 2003, and 15 percent a year from the end of 2010. The consumer brokers did worst: SelectQuote (NYSE: SLQT), a Medicare broker, returned 0.05 times the money from its first close in May 2020 to the end of 2025.
The companion deck. Insurance Brokers: a self-contained summary of the report.
Key findings
The report follows the industry from the London market and the American agencies to the listed groups, the private consolidators and the networks of Australia and India, and every figure in it is dated and sourced in the notes. These are the main findings of each part.
A broker’s revenue follows insurance prices and insured values while the insurer bears the loss, and the industry’s layers move on different cycles. Marsh spent about 1.1 percent of its 2025 revenue on capital assets while its operations brought in cash equal to 20 percent. A broker also earns interest on premiums it has collected and not yet passed to the insurer: on the report’s USD 500,000 commercial account about USD 2,260 a year at 2026’s short rate and about USD 50 at 2021’s. Retail broking, wholesale brokers who place hard risks, managing general agents (MGAs) who underwrite on an insurer’s behalf, reinsurance broking and consulting each have their own cycle, and in the third quarter of 2026 Marsh Risk grew 5 percent on its underlying basis while Marsh’s Reinsurance segment fell 6 percent. Only the United States has a listed industry of size. (Part I, Orientation)
Two legal rules made the broker’s business: only members could sign policies at Lloyd’s, and a New York court held in 1904 that an agent’s renewals belong to the agent. The first made the Lloyd’s broker the world’s wholesaler of hard-to-place insurance. The second made an American agency something that could be sold, so in 1961 J. Hyatt Brown paid USD 75,000 for his father’s agency, about 1.2 times its revenue, and bought its renewals. American groups later bought the London houses, paying a premium of 58 percent for Sedgwick in 1998 and 34 percent for Jardine Lloyd Thompson in 2018, because a London house was worth more inside an American distribution network than on its own. (Part II, Evolution, Chapters 4 and 5)
Consolidation ran less on economies of scale than on a difference in price between private agencies and listed brokers. In 2010 a well-run private agency changed hands at about 6 times EBITDA guaranteed plus an earnout, by the figures of Reagan Consulting, an adviser to agencies, while the five largest listed brokers traded at about 10 times on the authors’ GAAP-based proxy. Private equity followed that difference, and the count of announced US and Canadian agency deals by OPTIS Partners rose from 184 in 2009 to a peak of 1,111 in 2021. After the Justice Department stopped the merger of Aon and WTW in 2021, the largest brokers bought or agreed to buy five large private brokers built by acquisition, NFP, McGriff, AssuredPartners, Accession and USI Insurance Services, for about USD 61bn from 2024 to 2026. (Part II, Evolution, Chapters 6 and 7)
A broker’s value is destroyed by conflicted revenue and by revenue booked before the cash arrives. In October 2004 New York’s Attorney General alleged that insurers had agreed to pay Marsh more than USD 1bn of contingent commissions, payments for the volume or profitability of the business it placed with them, to steer clients their way. The contested payments equaled more than half of Marsh’s 2003 net income, and its shares fell 48 percent in four sessions, about USD 12bn of value, nearly fourteen times its USD 850m of restitution. The Medicare brokers booked a policy’s lifetime commissions at the sale and cut the estimates when customers left sooner: eHealth (NASDAQ: EHTH) carried USD 1,123m of commissions receivable at the end of 2025 against USD 554m of revenue for the year, and GoHealth went through Chapter 11 in 2026. (Part II, Evolution, Chapter 8)
A broker is paid before anyone knows whether the policy makes money, so its margins hold while insurers’ results swing. Kinsale Capital (NYSE: KNSL), an insurer that writes only through brokers, paid them an average commission of 15 percent of gross written premium in 2025. On a hard-to-place risk that passes through a retail broker, a wholesaler and an MGA, the intermediaries keep about 27 cents of the premium dollar on the authors’ illustration. In 2023 the US property and casualty insurers paid out 102 cents in claims and expenses for every dollar of premium, while Marsh’s GAAP operating margin was 23 percent. In 2009, with commercial premiums falling about 5 to 6 percent in every quarter, Marsh’s retail broking fell only 1 percent on its underlying basis. (Part III, Structure & Economics, Chapters 9 and 10)
People cost decides a broker’s margin, and the producers who hold the client relationships are both its main asset and its weak point. One point of the compensation ratio is worth about USD 737m of pre-tax income a year to the five largest brokers together. Interest on the premiums a broker holds costs almost nothing to earn, and Marsh’s went from USD 15m in 2021 to USD 497m in 2024 and USD 403m in 2025. Producers can leave: four Florida leaders of Marsh resigned on July 21, 2025 to build the US business of Howden, a private broker founded in London in 1994, and Marsh’s complaint alleged about 90 resignations in a day. The court let the injunction’s bar on soliciting Marsh’s clients lapse after September 19, 2026. (Part III, Structure & Economics, Chapters 11 and 12)
The five largest listed brokers are five different businesses, so no organic growth rate or margin compares directly with another. WTW is 54 percent consulting and Brown & Brown almost none, and Brown & Brown earns 86 percent of its brokerage revenue in the United States against about half at Marsh, Aon and WTW. Gallagher’s revenue grew 21 percent in 2025 on 6 percent organic growth. Aon, with the highest adjusted operating margin of the five at 32 percent, agreed on August 31, 2026 to acquire USI for USD 17bn in cash, which takes its net debt from 2.4 to about 4.2 times adjusted EBITDA on the authors’ pro forma. Outside New York the listed brokers are networks and marketplaces, such as Steadfast Group (ASX: SDF) in Australia and PB Fintech (NSE: POLICYBZR) in India. (Part IV, The Players, Chapter 13)
The longest records were built by managers who bought small agencies at a disciplined price and paid their people in stock, and every record depends on the multiple at which it began. Under J. Patrick Gallagher Jr., chief executive since 1995, Gallagher returned 15 percent a year against 11 percent for the S&P 500, and Greg Case’s Aon returned 14 percent a year from April 2005 against 11 percent. Robert Kelly’s Steadfast returned 15 percent a year in Australian dollars from its 2013 listing against 8.4 percent for its benchmark. The higher valuations of 2013 to 2022 were worth about 5 points a year of Dan Glaser’s 19 percent a year at Marsh, while John Doyle, who took over in January 2023 with the multiple near its peak, has returned 5.6 percent a year against 22 percent for the index. (Part IV, The Players, Chapters 14 and 15)
The acquisition programs work because a small agency costs about 9 to 11 times EBITDA and is worth more inside a major, and private capital now competes for the same agencies. From 2010 to 2025 the five largest spent USD 78bn of cash on acquisitions, and Gallagher spent USD 31bn of it while its share count rose from 103 million to 257 million. An earnout adds about 12 to 14 percent of an agency’s price, and the US tax deduction for purchased goodwill returns about 1.1 times its EBITDA. Buyers backed by private equity have done 69 to 76 percent of the deals OPTIS counts every year since 2019. Without the savings it expected, Aon paid about 23 times USI’s adjusted EBITDA against its own 13 times, by the authors’ computation. (Part IV, The Players, Chapters 16 and 17)
Organic growth, adjusted earnings and fiduciary balances are each defined by the company that reports them, and each misleads a reader who takes it at face value. In the second quarter of 2026 Brown & Brown’s total revenue rose 30 percent with Accession, while its organic revenue fell 0.7 percent without contingent commissions and rose 0.7 percent with them. The listed brokers use seven definitions of organic growth, so a gap of less than a point between two companies is within what the definitions alone produce. Adjusted earnings add back the amortization of acquired customer lists, and Gallagher’s 2025 adjusted EPS of USD 11 was 86 percent above its GAAP EPS of USD 5.7. At the end of 2025, 38 percent of Gallagher’s balance sheet belonged to its clients and insurers. (Part V, Speaking the Language)
At the October 21, 2026 close the market paid little for the brokers’ acquisition programs. The five largest traded at a median 14 times trailing adjusted EBITDA, from WTW’s 13 to Gallagher’s 17, and their median P/E on a uniform proxy had run from 14 at the end of 2009 to 29 at the end of 2021. A 5.5 percent free-cash-flow yield with 5 percent organic growth prices a return of about 11 percent a year before any acquisition. On the authors’ worked example, a dollar of agency EBITDA bought at 9 times costs 9.4 times net and is worth about 14 times inside a major after 5 percent attrition, a gain of 4.2 times, which turns into a loss at the 2009 trough multiple. (Part VI, Analysis & Valuation, Chapters 21 and 22)
The brokers’ returns came either from buying revenue or from earning more on it, and the starting multiple dominated both. From 2010 to 2025 Gallagher returned 18 percent a year and Brown & Brown 15 percent, compounding revenue at 13 to 14 percent a year, roughly half of it acquired. Aon returned 16 percent on revenue growth of 4.8 percent a year and earned the rest from margin and buybacks, while the S&P 500 returned 14 percent. In the one soft market of the record, from the end of 2005 to the end of 2010, the five largest earned a median 1.9 percent a year against 2.3 percent for the index, as their earnings held and their multiples fell to the market’s. (Part VI, Analysis & Valuation, Chapter 23)
AI has improved the brokers’ operations without yet reaching their revenue or their pay costs, and the exposure lies in small policies sold through forms. On February 9, 2026, the morning Insurify announced a car insurance comparison app inside ChatGPT, the five largest brokers lost about USD 25bn of market value while the S&P 500 rose. By October 21 Gallagher stood 7.0 percent above its February 6 close and Goosehead Insurance (NASDAQ: GSHD), which sells home and auto insurance through franchised agencies, 32 percent below it. Aon cut its invoicing cycle from 22 to 11 days, yet Marsh’s compensation ratio went only from 59 percent in 2019 to 58 percent in 2025. A commercial broker’s largest risk is an insurer paying less commission for less work, and no insurer had announced such a cut by October 22, 2026. (Part VII, The AI Inflection)
A broker carries no underwriting loss, but it carries the placements it arranges and, when it is private, heavy debt. Of twelve large brokers that left the record between 1980 and 2026, nine were sold or merged, two were taken private and one, GoHealth, went bankrupt. Marsh recorded USD 569m of charges related to Greensill in the first nine months of 2026, 37 percent of its third-quarter adjusted operating income, and Aon USD 197m of settlement expenses after the collateral fraud at Vesttoo in 2023. S&P Global Ratings put the leverage of Acrisure at 9.6 times EBITDA at the end of 2025 against about six times on its lenders’ definitions, and on floating-rate debt each 100 basis points of interest costs a private broker 6 percent of EBITDA at 6 times leverage. (Part VIII, Risks & Debates, Chapter 26)
The open debates of October 2026 will be settled by numbers that the companies and the regulators publish by October 2027. The slowdown in growth is cyclical if Aon, Marsh Risk and WTW’s Risk & Broking hold 4 percent organic growth through two more quarters of falling property prices. The savings Aon reports against its plan will settle the USI purchase, and a priced offering will settle the confidential filing Hub International made in June 2026. Whether brokers’ pay becomes a regulatory risk again will be settled by Australia’s revised brokers’ code and by the final regulation of IRDAI, India’s insurance regulator. (Part VIII, Risks & Debates, Chapter 27)
The appendices give the analyst the working tools: the investable universe of 33 listed companies worth about USD 325bn at the October 21, 2026 close, with the largest private brokers beside them, a checklist of 22 questions in the order of Chapter 21, a reading course of letters and filings with a listening course of 42 recordings of founders and chief executives, and the numbered notes that source the report. (Appendices)
How to use this primer
The report does not need to be read in order. Suggested paths:
a generalist with limited time, Parts I and VI plus the checklist in Appendix B;
a reader interested in the history, Part II with Chapter 23;
an accountant, Part V with Chapter 21;
an analyst working on a specific company, Chapter 13, then Parts III, V, and VI in order;
a reader of the brokers outside the United States, Chapters 3 and 4, the networks and founders of Chapter 15, the private London groups of Chapter 17 and the Australian accounts of Chapter 19;
a risk officer, Part VIII with Chapters 10 and 12;
a technologist, Part VII;
a reader who came for the owner-operators, Chapters 14 to 16, with Chapter 23 for what their records are worth against the benchmarks.
Every chapter ends with a “What to remember” box, and the boxes read in sequence summarize the report. The checklist follows the order of the analysis in Chapter 21, from organic growth and the margin to what the company acquires and how it pays, then the fiduciary balances and the debt, and last the people and the board, because a broker’s value to its owners depends on growth it did not purchase, on the price of what it did purchase and on whether its producers stay.
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This content is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; readers should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.