Broker 'Goldilocks' Era Is Over, Analysis Suggests

The previous "Goldilocks" phase for insurance intermediaries was marked by rising rates and exposure growth that buoyed results for most firms. This period of easier growth is now considered to be over, giving way to a more challenging market with moderating rates and fewer broad tailwinds. Organic growth for insurance brokers is expected to normalize to around 5% annually, a decrease from the 6% to 9% growth rates seen between 2022 and 2024. This slowdown is attributed to decelerating GDP growth and a shift from mid-single-digit to low-single-digit increases in commercial pricing. For instance, Baldwin Insurance Group reported a 3% organic revenue growth in the fourth quarter of 2025, down from 7% for the full year. In response to slowing organic growth, merger and acquisition (M&A) activity remains a key strategy. Despite a drop in public brokers' stock values, M&A volume in the U.S. saw 649 announced deals as of November 2025, a slight increase from the previous year. Private equity-backed buyers were a significant force, accounting for 72.6% of these transactions. The role of technology, particularly AI, is a central theme in this new era. Insurtech is no longer just about efficiency; it's reshaping the core functions of the industry, with projections that over 90% of pricing and underwriting tasks will be fully automated by 2030. This shift is compelling brokers to move from transactional roles to becoming trusted advisors who leverage technology for deeper analysis and client service. Brokers are now focused on integrating AI to automate routine tasks like data entry and claims processing, allowing them to concentrate on complex client needs. This human-in-the-loop approach, where brokers augment AI's analytical power with their own expertise, is seen as crucial for navigating the evolving landscape and maintaining strong client relationships. The industry also faces a significant talent shortage, with expectations of losing over 400,000 workers by 2026 due to an aging workforce. This demographic challenge adds another layer of pressure for firms to innovate and adapt their business models to attract and retain new talent. Looking ahead, the focus is on building vertically integrated platforms that can withstand various market cycles. Companies are moving away from federated models to more standardized and integrated operations to improve efficiency and data analysis capabilities. This strategic shift is aimed at creating sustainable growth in a market that no longer lifts all boats.