Entering the year, publicly traded insurance brokers experienced meaningful valuation pressure as investors recalibrated expectations amid a softening property and casualty (P&C) market, moderating organic growth, and emerging concerns around AI-enabled distribution models. This followed a difficult 2025, during which MarshBerry’s Broker Composite declined 7.1%, significantly underperforming the broader equity markets (S&P 500 +16.6%; DJIA +13.4%). Reflecting the continuation of these headwinds, the Broker Composite declined an additional 10.4% during the first quarter of 2026. While valuations were largely flat during Q2 (+0.4%), the sector has since regained momentum, with the Broker Composite advancing 6.8% from June 30 through July 23. However, persistent inflation driven by international conflicts prompted investors to largely abandon expectations for interest rate cuts in 2026, with some now even leaning toward potential rate hikes, renewing uncertainty around the economic outlook.
Investor appetite for specialty continues
Against this backdrop of economic uncertainty, investor appetite for specialty intermediary businesses remained exceptionally strong. Through June 30, 2026, there were 52 specialty intermediary merger and acquisition (M&A) transactions announced in the U.S., representing an 11% increase over the first half of 2025.
