'Sluggish' UK brokerage M&A set to fall short of previous years in 2025, MarshBerry predicts

By Rebecca Delaney

June 6 - (The Insurer) - UK insurance brokerage M&A in 2025 is unlikely to match levels seen in the previous two years, with sector deal volumes down 30% to 42 for the year to the end of May, compared to 60 deals over the same period in 2024, MarshBerry forecast on Friday.

Although only seven new deals were announced in May, one valued at more than 100 million pounds indicates that 2025 could see an above-average number of very large deals, MarshBerry said in a market update.

The major deal saw JMG Group announce new backing from U.S. PE firm GTCR, in partnership with existing investor Synova.

MarshBerry said the level of more than 150 UK sector deals seen in 2023 and 2024 will likely not be matched in 2025, adding that the majority have been relatively small, with 69% for targets with a value below 5 million pounds, compared with a long-term average of 59%, and only 14 deals have involved a target with 20 or more staff.

May's other notable transactions included MGA consolidator Optio Group's acquisition of UK MGA Custodian Management, which specialises in professional liability and management liability. Elsewhere, Clear Group acquired private client high net worth MGA Protect Underwriting, which will sit within recently launched Shape Underwriting.

SUPPLY OR DEMAND?

MarshBerry attributed the fall in M&A deal volume predominantly to supply challenges, as the number of privately-owned brokers available has been rapidly decreasing amid heightened consolidation.

Unlike in the MGA segment (where the level of new business formation is very high), the rate of new broker formation and the subsequent scaling of those new brokers to a meaningful size is "not nearly high enough" to replenish the independent brokers lost through sector M&A every month, MarshBerry said.

"That is not to say that the level of demand for targets doesn’t also ebb and flow, impacting M&A activity. There are still a very high number of active consolidators in the UK market, as well as a long line of overseas buyers keen to buy here, if they can find the right target," said John Nisbet, managing director at MarshBerry.

"But as many of those buyers go through their own cycles of refinancing and changes in ownership, refocusing M&A efforts to overseas markets, and/or addressing the integration of businesses they have previously acquired, the levels of domestic M&A they undertake can speed up or slow down."

Nisbet added that several of the most prolific UK buyers of the past few years have done very little or no M&A so far in 2025, which, combined with the supply constraints, is likely dampening levels.

PRIVATE EQUITY TRENDS

On a YTD basis, only 40% of announced deals have involved private equity, which MarshBerry noted as below the level in any full year since before 2016.

Three (BPL, Seventeen Group, JMG Group) of the most active UK consolidators of the past few years have taken on new PE investment in 2025, which will provide capital support for further M&A.

In addition, Miller, PIB, Ardonagh, Clear and SRG have recently stated their ambitions to undertake more M&A in the UK.

"More than half of the new deals in May involved a privately-owned buyer. This is only the sixth month in the past five years that this has been true," said Nisbet.

"Admittedly the sector deals involving privately owned buyers are mostly small ... but it does demonstrate that for smaller local brokers there are options that go beyond the usual suspects."