Broker consolidation in Canada’s property and casualty (P&C) sector shows no signs of slowing, and the dynamics of the market suggest further activity ahead, according to Stéphane Lespérance (pictured), president of Aon Canada.
In an interview with Insurance Business, Lespérance said scale has become increasingly important for brokerages, particularly as they look to utilize negotiating power with insurers and provide clients with access to broader tools and expertise.
“It’s becoming more important,” he said. “If you look at the broad base of all the brokers out there, I think secretly they’re going to acknowledge that scale is important, because many brokers are trying to be attached to a larger organization, to benefit from their tools, to benefit from the scale they have with the insurance companies, to negotiate better terms on behalf of their clients.”
That push has already transformed the Canadian brokerage landscape, with recent years bringing a wave of deals from consolidators and aggregators. But Lespérance expects the trend to continue.
Broker consolidation, he said, will increase in the coming weeks, months, and years. Many acquisitions done in the recent past were conducted against a backdrop of a declining market.
“Now, as premiums reach the bottom of the curve, some brokers may be looking at their profitability. That could create additional movement because some will want to see better returns on their prior investments,” Lespérance said.
He added that aggregators remain active in courting independent brokerages, while diversification pressures are also shaping the market.
“You’ll probably see more diversification on the human capital side, with brokers being more engaged in health, benefits, and other products that customers will need,” he said.
While scale clearly brings negotiating leverage, Lespérance was quick to stress that it does not replace the fundamentals of the brokerage business.
“It doesn’t solve for everything, and you still need expertise, good people. You need differentiated products,” he said. “In the end, it’s a people business, and clients rely on their broker to provide what they need.”
That point is particularly relevant as broker consolidation accelerates. Large organizations may bring greater resources and carrier clout, but without high-quality talent, the advantage risks being wasted. For clients, the measure of value remains the same: the expertise, creativity, and service provided by the individual brokers they deal with.
Consolidation also raises a persistent question: how well do the pieces fit together after a deal closes? Lespérance cautioned that cultural misalignment can undermine the intended benefits of acquisitions.
“For me, the major obstacle is obviously the cultural fit,” he said. “There was certainly a race from some aggregators to just add more volume, which is understandable. But if you’re not integrating as you move on, it creates risks. You’re purchasing clients who don’t really have a sense of who the organization is and what it’s all about.”
He added that the most successful acquisitions are those that either bring in expertise the brokerage does not already have or align seamlessly with the acquiring firm’s culture. Without those elements, acquisitions can introduce more risk than value.
The emphasis on integration reflects a broader lesson in consolidation: bigger is not automatically better. Lespérance noted that while some players have prioritized rapid growth through acquisition, others are more focused on organic investment.
“We much prefer developing talent rather than making acquisitions,” he said. “We’ve been very prudent in how we’ve made acquisitions over the years. Instead, we generally prefer investing in new talent, developing them, and bringing them to the next level.”
That approach speaks to the tension at the heart of consolidation: scale is increasingly vital in negotiations and market positioning, but it cannot come at the expense of culture, expertise, or client trust. For Canada’s brokerage sector, the challenge will be balancing the pursuit of size with the need to maintain service quality and integration discipline.
In a previous conversation with Insurance Business, Lespérance forecasted that the soft market conditions will prevail for some time. While some expected the post-pandemic hard market to last longer, Lespérance said current conditions are firmly on the softening side of the cycle. “Right now, we’re talking about a buyer-friendly market, which is the case,” he said. “We’re not at the bottom of the soft market – I think it will continue.”
