Insurance agency mergers and acquisitions fell to their slowest pace in nearly eight years through the third quarter of 2026, as private equity-backed platforms pulled back from high-volume tuck-in buying and shifted focus toward integration and exits.
Firms announced 439 insurance agency acquisitions in the first three quarters of 2026, down 19% from the 539 recorded in the same period a year earlier, according to OPTIS Partners, a Chicago-based investment banking and financial consulting firm that tracks distribution M&A. The trailing 12-month deal count through September (600 transactions) has not been lower since the second quarter of 2018, when 578 deals were logged.
Q3 alone produced 144 transactions, a 27% drop from the 197 recorded in the same quarter of 2025, though it edged up 3% from Q2. Year-to-date tallies are now 30% below the previous five-year average, according to the OPTIS Partners database.
“Deal flow to date in 2026 is slower than we anticipated,” said Steve Germundson, a partner at OPTIS Partners. “Based on conversations we’ve had and historical trends, we expect Q4 to pick up somewhat, but still at a slower pace than prior year-end quarters.”
The decline is not a sign that private equity has lost interest in insurance distribution. It reflects a structural shift in how PE capital is being deployed. Private equity-backed and hybrid buyers (a category that includes institutional investors such as family offices, pension funds, and sovereign wealth funds) still accounted for 76% of all announced transactions in Q3 and through Q1-Q3 2026.
But the buyer pool has narrowed sharply. Over the past four quarters, only 82 unique buyers were active in the market. For the first time, there were more unique PE-backed buyers (43) than all other buyer types combined (39). The top 10% of acquirers now account for 55% of deals closed, up from 46% in 2021, according to the OPTIS Partners report.
Among the most active acquirers over the trailing 12 months, BroadStreet Partners led with 69 deals, 25% above its five-year average. Inszone Insurance Services followed with 48 deals year to date through September, up 41% from the prior-year period. Hub International, by contrast, announced just 22 deals through the first nine months of 2026, 50% below its five-year average.
Only eight firms closed 20 or more transactions in the trailing 12 months, the lowest count since 2020. Of those, only two increased their deal flow year-over-year: OneDigital, up 50%, and Inszone, up 31%, according to OPTIS Partners.
The broad pullback reflects pressure on PE platforms to prioritize deleveraging and integration over volume. “Most of the private equity-backed platforms still want to make acquisitions but are facing pressure to prioritize deleveraging, integration, and exits over sheer volume,” said Tim Cunningham, managing partner at OPTIS Partners. “This pulls deal counts down even as capital commitments stay high.”
The shift toward fewer, larger transactions is already visible in the market. Several PE-backed platforms acquired in 2019-2021 are at or past their typical hold periods, and the expectation from OPTIS Partners is that recapitalizations and large-scale ownership changes will accelerate over the next two years. Aon’s announced $17 billion acquisition of USI Insurance Services from KKR, expected to close in Q4 2026, is a direct PE exit after nearly a decade of KKR ownership. Separately, the proposed $7.7 billion take-private of The Baldwin Group, Tampa, Florida, by Sequence Holdings and DFO Management would remove one of the sector’s largest publicly traded brokers from the public markets entirely.
The thinning buyer pool and rising selectivity are sharpening the gap between well-positioned sellers and the rest. Valuations for agencies with producer-led organic growth, strong employee benefits books, or specialty niches are expected to hold steady, according to OPTIS Partners. Agencies whose growth came primarily from rate increases face lower multiples and larger earnout requirements.
The shifting dynamics in 2026 insurance M&A are reflected in valuation data as well. According to MarshBerry’s Q2 2026 Insurance Brokerage M&A Market Update for the US, valuation multiples for high-performing firms averaged 14.22 times EBITDA on an upfront base price, with potential total enterprise value reaching 17.45 times when maximum earnouts are achieved. Agencies outside that tier saw base multiples averaging 11.57 times on the upfront price, with a maximum potential enterprise value of 14.61 times.
“As buyers continue to scrutinize their acquisition targets more closely, it’s ever more important for agency owners who are planning to sell in the next few years to start taking concrete steps now to make their agency a more attractive target,” Germundson said.
The urgency behind that advice has its own context. Insurance agency deal volume fell 12% in 2025 and, through Q3 2026, the trajectory has not reversed. With the number of active buyers at its lowest point in years and PE platforms focused on exits rather than new tuck-ins, owners who wait to see whether conditions improve may find fewer interested parties when they eventually come to market.
