The UK insurance distribution M&A market has undergone a valuation reset, according to Olly Laughton-Scott, managing director at MarshBerry.
Laughton-Scott (pictured) compared the shift to London’s prime property market, which had experienced years of uninterrupted price growth before falling back. He said the broking sector was undergoing a similar recalibration. While the drop was not as severe as in real estate, the market was adjusting from its peak.
Private equity-backed brokers that had once aimed for exits at 16–20 times EBITDA were facing lower valuations. The sale of AssuredPartners to Gallagher at a reported low-teens multiple served as one example. Even though there were deal-specific factors, the transaction influenced sentiment across the market. Other large transactions also closed below prior expectations, and pricing at the top end quickly filtered down to smaller deals.
According to Laughton-Scott, a hallmark of the overheated phase was the dominance of a handful of acquirers in 2020, when activity was driven more by a rush for scale than by strategic fit. That concentration later eased, opening the market to a wider pool of buyers.
"As prices drop, new buyers get more opportunities," he said. When the largest players pulled back, it created opportunities for others, often more strategic, and sometimes more international.
That shift came against a backdrop of contrasting market dynamics between the UK and US. Laughton-Scott said that US deal activity remained far greater in volume, but consolidation there was less advanced. This led some US brokers to consider UK acquisitions as a springboard for European expansion. However, recent UK pricing trends caused some to question whether the complexity of overseas acquisitions was worth pursuing when domestic opportunities remained.
"The recent amelioration of prices is widening the buyer pool," Laughton-Scott noted.
International interest still persisted. MarshBerry was recently engaged by a Middle Eastern conglomerate to review the Lloyd’s broking sector, hosted an Iberian broking group in London, and facilitated meetings with a North American broker seeking to acquire a UK retail operation. The moderation in valuations attracted a more diverse mix of buyers, which proved healthy for the market.
"It’s encouraging to see the market once again prioritizing strategic fit over scale for the sake of scale," he said.
For sellers, Laughton-Scott said that the era of paying top multiples for scale alone was over. Buyers were now prioritising strategic fit, cultural alignment, and integration potential, as these factors were what set deals apart in the current market.
