4 Stocks to Watch From the Prospering 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 Hannover Ruck SE HVRRY, eHealth, Inc. EHTH, 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 insurance brokerage market is expected to grow from $140.38 billion in 2025 to $145.8 billion in 2026 and is projected to reach $176.14 billion by 2031 at 3.86% CAGR over 2026-2031. 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, is 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 Bleak Prospects

The Zacks Insurance - Brokerage industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #210, which places it in the bottom 13% 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, reflects dull 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 bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts have been losing confidence in this group’s earnings growth potential. The industry’s earnings estimate has declined 23.7% for 2026 in a year.

Before we present a few securities and exchange stocks worth considering 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 41.3% in a year against the Finance sector’s growth of 11.5% and the Zacks S&P 500 composite’s appreciation of 20.6% 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 3.51X compared with the Zacks S&P 500 Composite’s 7.83X and the sector’s 4.27X.

Over the past five years, the industry has traded as high as 8.56X, as low as 3.28X, and at the median of 6.92X.

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.

Hannover Ruck: Germany-based Hannover, with a market capitalization of 36.52 billion, provides reinsurance products and services in Germany and the United Kingdom. It is one of the most profitable reinsurers in the world. This insurer is poised to benefit from strong and diversified premium growth, strong underlying performance and an improved pricing environment. A broad client relationship provides strong access to new business opportunities. Superior financial strength and long-standing client relationships should support growth and high quality of portfolio.

Earnings for this insurance broker have grown 15.2% in the past five years, better than the industry average of 13.5%. The Zacks Consensus Estimate for 2026 earnings indicates a year-over-year increase of 5.9%. The stock has gained 10.2% over the past year.

Price and Consensus: HVRRY

eHealth: Austin, Texas-based eHealth, with a market capitalization of 39.99 million, provides consumer engagement, education and health insurance enrollment solutions in the United States. Stable enrollment results during AEP, a shift toward higher-quality direct branded channels, and the use of AI tools that boosted marketing efficiency and sales conversion bode well for growth. eHealth also noted that the lifetime value is expected to grow year over year because of higher commission rates and better persistency trends.

The Zacks Consensus Estimate for 2026 earnings indicates an increase of 1,153.3% year over year. This insurance broker has a solid track record of beating earnings estimates in one of the last four quarters and missing in the other three, with an average of 4.27%. The stock has lost 85% over the past year.

Price and Consensus: EHTH

Willis Towers Watson: Based in London, the United Kingdom, Willis Towers Watson, with a market capitalization of $29.22 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 8.3% in the past five years. The expected long-term earnings growth rate is 11.4%. The Zacks Consensus Estimate for 2026 earnings indicates a year-over-year increase of 14.4%. The consensus estimate for 2025 earnings has moved 1.5% north in the past 30 days. WTW has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 2.65%. The stock has lost 10.3% over the past year.

Price and Consensus: WTW

Aon: Dublin, Ireland-based Aon, with a market capitalization of $72.10 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 insurer mainly looks to expand in the health and benefits business, flood insurance solutions, and risk and insurance solution operations.

Earnings of Aon have grown 10.5% in the past five years, while the expected long-term earnings growth rate is 9.9%. The Zacks Consensus Estimate for 2026 earnings indicates an increase of 11.8% year over year. The consensus estimate for 2026 earnings has moved 0.5% 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 0.99%. The stock has lost 18% over the past year.

Price and Consensus: AON

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Hannover Ruck SE (HVRRY): Free Stock Analysis Report
 
Aon plc (AON): Free Stock Analysis Report
 
eHealth, Inc. (EHTH): Free Stock Analysis Report
 
Willis Towers Watson Public Limited Company (WTW): Free Stock Analysis Report

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

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