Record Number of Deals in UK Insurance Distribution Market
The UK insurance distribution market witnessed a record number of deals in 2024, with 152 transactions announced, according to John Nisbet, managing director at Marshberry. Of these deals, 21% involved overseas buyers from 18 different countries, with US-based firms playing a significant role in the increase in cross-border acquisitions.
The UK market remains attractive to international buyers due to its shared language and similar business culture with the US, making it a convenient expansion option. Many US brokers already operate in the UK, particularly through Lloyd’s of London, facilitating their market entry. Nisbet expects the trend of overseas buyers increasing their presence in UK insurance acquisitions to continue in 2025, with US firms likely to explore other European markets for consolidation.
The rise in domestic consolidation is creating challenges for private equity investors as the supply of available targets decreases. To maintain growth, PE-backed companies will need to look beyond the UK or focus on organic growth and operational improvements. While the limited supply of UK insurance businesses may not lead to higher valuations in 2025, competition for acquisitions is expected to increase, potentially driving more diverse deal structures.
Retirement-driven sales remain a key factor in market consolidation, with the average age of sellers in 2024 being 58. Notably, there was an increased proportion of deals involving privately held buyers, suggesting opportunities for smaller, owner-managed brokers in local M&A activity. As the UK market matures, UK firms are likely to expand into areas such as health insurance and employee benefits, offering opportunities for diversification.
