Across the global insurance industry, 2025 has seen a ramping up of big mergers and acquisitions (M&A). Take three consecutive months as an example. In July, Aviva’s takeover of Direct Line Group for £3.7 billion was a landmark consolidation event for the UK’s insurance industry. In the US, Arthur J. Gallagher closed its acquisition of AssuredPartners for US$13.45 billion in August, one of the largest insurance brokerage deals in recent history. In September, the regulator approved Insurance Australia Group’s (IAG’s) takeover of motor insurer RACQ, adding about AUS$1.3 billion to the Aussie giant’s gross written premium.
Deals like these can attract criticism from consumer advocates and some regulators over concerns they lead to higher insurance premiums and standardised insurance offerings. However, insurance leaders around the world, among them many brokers, see them in an overwhelmingly positive light.
“It's not only good, I think it's essential,” said Hamish MacDonald-Nye (main picture, left), CEO of ProRisk Group. Tim Mathieson, acting CEO of international brokerage giant Steadfast Group, broadly agrees. “I think mergers and acquisitions can be really valuable providing we take all the stakeholders into account,” he said.
Despite concerns from some quarters, brokers directly involved in these transactions argue that consolidation is not merely a trend but a necessity for building a modern, resilient insurance sector. Mathieson believes that, when approached thoughtfully, M&A can deliver widespread benefits:
“Firstly, from a client perspective, there are benefits in having access to a broader range of products and services through a broking business as it merges and acquires over time.” He noted that brokers themselves benefit from shared expertise and solutions to succession challenges, while insurers and shareholders can unlock value through scale and operational synergies.
Mathieson is clear, however, that the interests of all stakeholders must be carefully balanced.
“I think providing that the deal is approached considering all of those stakeholders and not necessarily just in the interest of the shareholder, it can be a really good outcome,” he said.
He describes the industry’s evolution as cyclical: smaller, family-run brokerages may eventually seek the support and resources of larger groups, especially as regulatory and technological pressures mount. “Eventually they get to a size where it's just not viable to continue on dealing with all of the specific areas of running a business,” said Mathieson.
MacDonald-Nye added that M&A is fundamentally about strengthening the industry’s capacity to meet compliance and operational challenges. The outcome, he said, is a more resilient business, better positioned to invest in technology, pool resources and create broader opportunities for staff and clients.
He also highlighted the personal motivations behind M&A activity. “If you've started a business and you've built it up, if you've devoted all your time and energy to it, you need to be able to derive some value out of it,” he said.
Mathieson pointed out that M&A isn’t solely about consolidation. The process can also prompt some stakeholders to exit and launch new insurance ventures, further fuelling industry dynamism.
Critics frequently warn that consolidation can reduce consumer choice and drive-up premiums.
“What’s left is a market dominated by a small number of giant players, and that means higher premiums, less choice, and greater risks for consumers,” said Rod Camm, interim executive director of the Motor Trades Association of Australia (MTAA), referring to Australian insurance giants IAG and Allianz acquiring state-based motor insurers.
There are also concerns that large-scale mergers disrupt staff and customers, as operations are integrated, roles are cut and different workplace cultures are forced to merge or coexist.
Some industry observers argue that smaller-scale M&A can be more successful, particularly when a merger addresses a specific challenge such as a technology gap. Mathieson acknowledged these concerns but insists that customer impact must remain paramount.
“If there's no benefit for the client, well, it shouldn't proceed, right?” he said.
MacDonald-Nye is more sanguine.
“I don't think it's anti-competitive,” he said. “I'm not overly concerned about that, I don't think that's an issue.”
In fact, he argued, the market remains “hyper competitive” and, if anything, the current global M&A wave is helping to keep premiums in check.
“There's so much capacity out there so if we're talking from an MGA or insurer point of view, we're in a soft market, there's no indication that that [M&A] is necessarily leading to higher premiums,” he said.
