4 Stocks to Watch From the Thriving Insurance Brokerage Industry

The Zacks Insurance Brokerage industry is expected to benefit from better pricing, prudent underwriting, rising demand for insurance products and global expansion, which, in turn, have been driving revenues. The fast-paced consolidations in this traditionally fragmented industry are expected to benefit Brown and Brown, Inc. BRO, Marsh & McLennan Companies, Inc. MMC, Willis Towers Watson Public Limited Company WTW and Aon plc AON.
Increased digitization should help the industry improve its basis points, scale and efficiencies.

About the Insurance Brokerage Industry

The Zacks Brokerage Insurance industry comprises companies primarily offering insurance and reinsurance products and services. Insurance brokers serve as intermediaries between clients and insurance providers, act on behalf of their clients and offer advice, keeping in mind clients' interests, against brokerage fees. Their business is directly linked to clients’ level of business activity. Some of these companies also provide risk management, third-party administration and managed healthcare services. Per a report by Mordor Intelligence, the global insurance brokerage market size is currently $140.38 billion in 2025 and is anticipated to reach $171.93 billion by 2030, witnessing a 4.14% CAGR during this period. Accelerated digitalization should help in the smooth functioning of the industry.

3 Trends Shaping the Future of the Insurance Brokerage Industry

Increased Demand for Products to Drive Revenues: The operational results of the industry players are dependent on clients’ level of business activity, which depends on the extent of economic activity in the industries and markets they serve. Thus, the growth of insurance brokers depends on increasing demand for customized and complex insurance solutions and rising awareness of insurance needs among consumers and businesses. Keeping this in mind, industry players are expanding globally, cross-selling products, improving pricing, tightening underwriting standards and designing products that are more appealing to customers and match their risk appetite. Better pricing ensures higher commissions for the industry players.

An increase in the aging population is driving the demand for retirement benefit products, while the rising population of baby boomers and millennials, along with increasing awareness, are boosting demand for medical insurance, life insurance, accidental insurance and other forms of insurance. 

Mergers and Acquisitions: The insurance brokerage industry is witnessing fast-paced consolidation. Per a report by Mordor Intelligence, the insurance brokerage market is driven by persistently growing mergers and acquisitions. The industry has been traditionally fragmented, with a number of small players. One of the factors driving mergers and acquisitions is that companies need to specialize in their businesses. Some other factors driving mergers and acquisitions include the interest of private equity firms in this sector, growing competition and slow organic growth. 

Increased Adoption of Technology: Insurance brokers are adopting digital tools for improved policy management, claims processing, and better customer interactions. Insurance companies are teaming up with insurtech firms to accelerate the integration of innovative technologies like artificial intelligence (AI), machine learning, blockchain, and IoT. The increased use of data analytics and AI integration enables brokers to offer personalized services, boost operational efficiency, improve risk assessment, and streamline operations. 

Accelerated digitization, robotic process automation, cognitive intelligence and blockchain should help insurers curb operational costs and aid margin expansion. This digital shift is expected to drive premium growth and boost efficiency. However, expenses associated with such investments increase costs and, in turn, the expense ratio. 

Zacks Industry Rank Indicates Bright Prospects

The Zacks Insurance - Brokerage industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #101, which places it in the top 42% of more than 243 Zacks industries.

The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, signifies encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is the result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are upbeat about this group’s earnings growth potential. The industry’s earnings estimate has declined 18.8% for 2025 in a year.

Before we present a few insurance broker stocks that you may want to consider for your portfolio, let's take a look at the industry's recent stock-market performance and valuation picture.

Industry Underperforms Sector and S&P 500

The Insurance Brokerage industry has underperformed its sector and the Zacks S&P 500 Composite over the past year. The stocks in this industry have lost 30.7% in a year against the Finance sector’s growth of 9.6% and the Zacks S&P 500 composite’s appreciation of 15.1% over the same period.

One Year Price Performance 

Current Valuation

On the basis of a trailing 12-month price-to-book (P/B), commonly used for valuing insurance stocks, the industry is currently trading at 3.72X compared with the Zacks S&P 500 Composite’s 8.49X and the sector’s 4.19X.

Over the past five years, the industry has traded as high as 8.38X, as low as 3.72X and at the median of 7.09X.

Trailing 12-Month Price-to-Book (P/B) Ratio

Trailing 12-Month Price-to-Book (P/B) Ratio

4 Insurance Brokerage Stocks in Focus

We are presenting four stocks currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Brown & Brown: BRO, with a market capitalization of $27.19 billion and headquartered in Daytona Beach, FL, markets and sells insurance products and services primarily in the United States, as well as in London, Bermuda and the Cayman Islands. New businesses, better customer retention, premium rate increases across the majority of business lines, strategic acquisitions and a strong financial position should continue to drive growth for this insurer.

Earnings of Brown & Brown have grown 21.5% in the past five years, better than the industry average of 15.2%. The expected long-term earnings growth rate is 10%. The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a 11.4% and 10.2% year-over-year increase, respectively. The consensus estimate for 2025 earnings has moved 1.2% north in the past 30 days. BRO has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 8.65%. The stock has lost 28% over the past year.

Price and Consensus: BRO

Marsh & McLennan Companies: New York-based Marsh & McLennan, with a market capitalization of $90.39 billion, provides advice and solutions to clients in the areas of risk, strategy and people worldwide. This insurance broker is well-positioned to grow on significant investments and acquisitions made within its operating units, product launches, enhanced digital capabilities and new businesses. 

Earnings of Marsh & McLennan have grown 13.4% in the past five years. The expected long-term earnings growth rate is 6.1%. The Zacks Consensus Estimate for 2025 and 2026 earnings indicates a 9.2% and 6.9% year-over-year increase, respectively. The consensus estimate for 2025 earnings has moved 0.2% north in the past 60 days. This insurance broker delivered a trailing four-quarter earnings surprise of 3.45%, on average. The stock has lost 19.5% over the past year.

Price and Consensus: MMC

Willis Towers Watson: Based in London, the United Kingdom, Willis Towers Watson, with a market capitalization of $30.87 billion, is a leading global advisory, broking and solutions company. Growing healthcare premiums, increased consulting work and software sales, strategic buyouts and effective capital deployment bode well for growth. Willis Towers’ growth strategy focuses on core opportunities with the highest growth and returns. This insurer innovated and developed its offerings in markets and boosted its abilities in faster-growth markets.

Earnings for this insurance broker have grown 9.4% in the past five years. The expected long-term earnings growth rate is 10.8%, better than the industry average of 10.4%. The Zacks Consensus Estimate for 2025 earnings indicates a year-over-year increase of 13.8%. The consensus estimate for 2025 earnings has moved 0.1% north in the past 60 days. WTW has a solid track record of beating earnings estimates in three of the last four quarters and missed in one, the average being 2.39%. The stock has lost 4.1% over the past year.

Price and Consensus: WTW

Aon: Dublin, Ireland-based Aon, with a market capitalization of $74.27 billion, offers risk management services, insurance and reinsurance brokerage, human resource consulting and outsourcing services worldwide. The divestiture of non-core operations to streamline its business and deepen its focus on more profitable operations generates a higher return on equity. This, along with cost-curbing measures, bodes well for growth. Aon has an impressive inorganic story. 

This Zacks Rank #3 company mainly looks to expand in the health and benefits business, flood insurance solutions, and risk and insurance solution operations.
Earnings of Aon have grown 11.4% in the past five years, while the expected long-term earnings growth rate is 10.4%. The Zacks Consensus Estimate for 2025 and 2026 earnings indicates an increase of 8.5% and 12% year over year, respectively. The consensus estimate for 2025 earnings has moved 0.6% north in the past 30 days. This insurance broker has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, with an average of 1.58%. The stock has gained 9.3% over the past year.

Price and Consensus: AON

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This article originally published on Zacks Investment Research (zacks.com).

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