Insurance brokerage buyers are beginning to screen acquisition targets for technology and AI readiness, even as valuations remain anchored to growth.
And while artificial intelligence may not yet warrant its own line in a valuation model, acquirers are increasingly distinguishing between brokerages equipped for a more automated future and those that could require substantial work after purchase.
Felix Morgan, CEO of Trucordia, said technology capability has become part of his firm's assessment of a target. Trucordia has completed roughly 200 acquisitions over a two-year stretch and now operates in 42 states.
"Insurance brokerage M&A is at an inflection point," Felix Morgan said. "It's always been true that there were targets that were better than others and that would create value, but you're seeing that divide happen at a much larger scale right now."
For Trucordia, the technology question is partly a question about integration mechanics. The firm moves acquired businesses onto a single agency management system, which makes a target's ability to plug in a practical constraint rather than an abstract preference.
"That's sort of a table-stakes thing to have a foundation in our organization of being able to leverage," Felix Morgan said. "We don't really get the size and scale leverage if we're not able to look at all of the data in a homogeneous type of way. So, we're looking for environments that are going to allow that and that we can plug into easily."
Brian Morgan, CEO of AGI, made a similar point about data architecture, arguing that fragmented systems create compounding problems.
"It starts with having a clean technology stack," Brian Morgan said. "Where you start to have disparate data systems and things where you're trying to bridge and patch things together, it becomes very challenging. And that's what a lot of firms have had to do in our space."
The industry is a long way from uniform readiness. MarshBerry's 2026 Technology & Governance Report found that 82% of respondents expect AI to affect broker productivity or reshape the broker's role, but only 13% are actively using AI tools in multiple parts of the business.
Adoption also diverges sharply by size. Reagan Consulting data showed just 11.5% of firms with less than $1.25 million in revenue invested in AI in 2025, compared with 84.2% of brokers generating more than $100 million.
Brian Morgan, whose firm markets its technology stack as an acquisition differentiator, estimated that broad AI implementation could deliver "anywhere from a 50% to 75% realistic uplift in a person's capacity" as tasks such as submissions, policy checking and proposal preparation are automated.
He said his approach is to redeploy that capacity rather than cut headcount, pointing to an expected wave of retirements from the industry over the next five to seven years. "It's not necessarily a cost saving. It's how do we reinvest in the business for growth, for retention of clients?" Brian Morgan said. "It's really more of a lift-up model."
A Reagan Consulting and BrokerTech Ventures study of top producers at nine Top 100 brokers found tech-enabled producers under 35 generated median new commissions of $172,000 in 2024, against $104,000 for others; though the research measures production, not valuations.
However, Agency Brokerage Consultants has argued that buyers are not currently paying higher multiples simply because an agency uses AI. Valuations remain centered on margin and growth, in that view, with technology becoming relevant only when it helps explain stronger retention, lower servicing costs or better revenue-per-employee figures.
There is also a lag. Buyers and valuation advisors work from historical performance, and even agencies that made significant AI investments over the past two years have had limited time to demonstrate sustained financial improvement in the results acquirers analyze.
Where AI is already moving the market is in appetite for particular books. Reagan Consulting partner Harrison Brooks said some buyers have become hesitant about personal lines because of potential AI disruption, describing a broader "flight to quality and size" toward middle-market, commercial and employee benefits operations. Felix Morgan likewise expects technology to exert more influence in personal lines than in complex commercial brokerage.
On price, the signals conflict. Brooks noted deal volume fell to an 11-year low in 2025 while pricing held, with guaranteed EBITDA multiples ranging from just under 10x for smaller deals to roughly 15x for the largest between 2023 and 2025.
Felix Morgan, buying lower down that market, sees something different. "The multiples are starting to compress somewhat, which I think is a downflow from the overall market," he said.
Brian Morgan expects the market to sort into tiers rather than reprice overnight.
"I think the agencies that say, 'Well, we're open to trying to figure out how we can do it better and differently,' are the ones that are going to be a higher priority," he said. "The ones that are really like, 'No, we've always done it this way, we've still got our fax machine, and if people want to drop off checks at the front door, they can' — I think the world is at a pivot point where it's going to evolve."
He stopped short of predicting an automatic premium, saying he expected "different classes of firms out there in our space: the ones that are more technologically advanced versus the ones that are lagging."
Felix Morgan, on the other hand, foresees “an evolution, not a revolution.” “It will continue to evolve in the industry and it'll become more standard practice, but I don't see it ever being a replacement for brokerage,” he said.
