European M&A Dips Slightly but Promising Markets Emerge

Having reshaped the insurance brokerage industry in the United States and United Kingdom, consolidation has found its way on to the European continent as local and foreign brokers seek expanded growth opportunities.

Many European insurance brokerages are defined by their traditionalism and family ownership, which are often strong selling points for clients looking for an entrepreneurial and personal experience with their broker. However, the post-COVID surge in merger and acquisition activity on the continent, reducing the proximity and familiarity between the businesses’ leaders and their clients, could threaten those values.

“Last year, Europe [including the United Kingdom] saw 560 announced transactions, down approximately 6.8% from the 601 deals recorded in 2023,” says Phil Trem, president of financial advisory at MarshBerry. “However, significant M&A was reported in at least 40 out of the 51 recognized European countries—a new record for the number of countries involved and the geographic spread of deal activity—and often involving major international brokers.”

United Kingdom

The United Kingdom is Europe’s largest insurance market, with the London market in particular providing innovative risk transfer solutions for global reinsurance clients. Similar to the United States, the already highly consolidated U.K. broker market counted 152 announced deals in 2024.

“There was a high volume of M&A activity in the U.K. in 2024, with U.K. insurance brokers continuing to attract M&A interest from both U.K. consolidators and international brokers,” according to Tomos Ashfield, chief development officer at The Ardonagh Group. “Whilst insurance broker deal volumes were up in 2024 on the prior year, the value of deals was broadly in line with the previous year.”

Various factors impact a brokerage’s valuation, including the size of the business, its specialization, and the ownership’s readiness to sell. In today’s market environment “valuation multiples range between 8x and 14x EBITDA,” says Ashfield. “However, depending on the size of the business and the synergistic opportunities that are available post-acquisition, the synergies may bring the multiple down by up to 2x.”

Continued acquisition activity and high multiples have decreased opportunities in the United Kingdom, driving U.K. broking groups to seek acquisition targets in Europe. U.K. brokers entering the European market via acquisition are likely to focus on scalable assets that can be used as a platform for a buy-and-build (or cross-border) strategy in the region in which they operate.

“We are not expecting a step up in valuations in the sector in 2025,” Ashfield says. “However, we expect activity in the U.K. to remain strong in 2025, driven by the number of active consolidators in the sector. Additionally, we expect larger consolidators to focus on expanding their European footprints rather than competing domestically, given the high volume of U.K. consolidators.”

Continental Europe

France and Germany have emerged as the most promising M&A markets in continental Europe due to their high volume of independent brokers and increasing buy-and-build opportunities.

“Brokers from U.S. and U.K. are pushing hard to enter and build a significant presence in the European Union; however, those strategic positions are not moving fast,” says Benjamin Verlingue, chairman and CEO at brokerage Adelaïde. “Independent brokers, including family owned, are also looking for acquisitions by highlighting a long-term value proposition and a more embodied project. A notable trend that emerged in France in 2024 is the move by some insurance carriers to make acquisitions to strengthen their position in the value chain, such as becoming third-party administrators (TPAs) for health and employee benefits contracts.”

Cross-border management—acquiring one or more foreign offices with the goal of developing strong international synergies—in theory should increase cross-border transactions given the newly available international solutions and teams.

“In my opinion, [effective cross-border management] is very tough to do because the synergies across multiple jurisdictions, especially in Europe, are extremely different; so, it can’t just be a cross-border play,” says Jochen Körner, CEO of Ecclesia Gruppe, citing the legal, regulatory, and taxation differences between countries.

Additionally, for large firms, entering the European market is not only a growth play, often focused on developing their own international network, but also a diversification strategy. “This is applicable to a very limited number of firms, but the idea behind the expansion is to create or improve their own global network in order to expand client offerings; at the same time, international growth is a way to spread their assets and portfolios in various geographies,” according to Körner.

From a valuation standpoint, however, entry into the French and German markets isn’t much cheaper than expansion into the United States or United Kingdom. “Everybody wants to be in Germany— because it’s Europe’s biggest economy, it’s one of the largest (re)insurance markets in continental Europe, and the country’s insurance broker market has little consolidation relative to other countries,” Körner says. “So there is a premium for that, and it won’t decrease anytime soon.”

Similarly, France remains attractive for global broker investment due to the market’s positive dynamics— economic diversity, market stability, and the presence of many innovative companies—despite ongoing economic and political uncertainties.

“The number of deals [in France] continues to rise, although significant transactions remain limited,” says Verlingue. “The deals covered a wide range, from strong regional brokers with national influence to small portfolios. Although buyers outnumber target opportunities, several deals did not go through due to high expected prices or degraded assets.”

2025 and Beyond

Europe is the world’s second-largest insurance market, with many brokers. Given the maturity of the industry in the region, a stable political environment, and attractive economies, opportunities to consolidate remain.

“We expect the acquisition activity in the European broking sector to continue in 2025 and it might even pick up in pace,” Körner says. “In addition to more U.S. and U.K. players, some of the [private equity]-backed brokers in Europe will need to refinance soon. This will have an impact on the market dynamics as firms will either have new cash for acquisitions or will need to look for an exit strategy.”

Continued acquisition activity on the European continent doesn’t bode well for traditional family-owned insurance brokers. While their slow disappearance could weaken broker-client relations in Europe, not everyone believes their disappearance isn’t without good reasons.

“Some of the varied family-owned businesses will remain independent and others will sell. Often, the family owning the business has all their wealth concentrated into one asset; so, selling the business could also be a way to diversify their own portfolio—in addition to other reasons, like the newer generation not being interested in running the business,” Körner says. “So, I don’t blame them.”