If the macroeconomic environment of early 2026 feels uncomfortably similar to early 2025, you’re not alone. Dealmakers across the insurance brokerage sector are once again navigating familiar terrain: optimism clouded by uncertainty, strong long-term fundamentals offset by short-term volatility, and a marketplace shaped as much by headlines as by fundamentals.
Last year, despite positive economic projections entering 2025, the year began under heavy scrutiny as markets reacted to uncertainty surrounding President Trump’s trade policies, renewed tariff discussions, and the potential for supply chain disruptions. Those concerns quickly translated into negative returns across financial markets in the first quarter of 2025, setting a cautious tone that lingered for much of the year.
Fast forward to 2026, and the pattern looks strikingly similar. This year’s first quarter has been defined by ongoing economic uncertainty, stubborn inflation, elevated borrowing costs, a cooling labor market, geopolitical tension, shifting global trade dynamics, and an unsettled political landscape. Unsurprisingly, this environment has fueled volatility, with all major market indices finishing Q1 2026 in negative territory.
Layered on top of these challenges is a significant new global headwind: escalating conflict involving Iran. This sudden geopolitical shock has injected fresh uncertainty into already jittery markets, triggering immediate disruptions in global energy markets and pushing Brent crude prices higher. Analysts have begun warning that a prolonged Middle East conflict could add meaningful upward pressure to consumer prices while increasing the risk of a broader economic slowdown. For an M&A market already grappling with valuation sensitivity and tighter financing, this additional volatility matters.
Yet perspective is important—particularly in insurance brokerage M&A. Despite a slow and uneven start, 2025 ended on a strong note, ultimately delivering the third-highest transaction volume on record for the industry. That resilience reinforced a familiar lesson: insurance brokerage remains a highly attractive sector, supported by recurring revenue, strong cash flows, and enduring client demand.
Will 2026 follow the same trajectory? No one really knows. While sector fundamentals remain intact, buyers and sellers are contending with an additional variable that wasn’t front and center a year ago: rapid advancements in insurance-focused artificial intelligence.