While many M&A headlines focus on size and deal value, the real drivers behind insurance-sector consolidation are increasingly strategic. Integration planning, people strategy, and long-term sustainability are now defining the difference between a transaction and a successful merger.
For Mike Latham (pictured), UK CEO at Verlingue, growth through acquisition is as much about structure and culture as it is about scale.
"Everyone's got a reason to want to be involved in mergers and acquisitions. But for us, it's not [just] about scale, it's about resources, it's about the plan," Latham said.
The current market landscape is creating multiple pressures and varied motivations for M&A. Larger players continue to pursue size and efficiency, while smaller and mid-tier firms often look for partners who can bring resilience and specialist capability.
That dynamic has played out across the market in recent years, as brokers look to strengthen specialist areas and reduce vulnerability to turnover. One such move helped Verlingue expand its employee benefits team. "We went from 25 to 40 people, which gave us a much better spread of resources," Latham said. "[Previously] if someone were to leave, the rest of the team really felt it."
For Latham, acquisition is only one part of a balanced growth model. "We've made two acquisitions in the 13 years I've been at the company, but most of our growth has come from a solid organic platform," he said. Maintaining that equilibrium, he suggested, helps sustain culture and integration quality.
Execution remains a crucial differentiator in today’s competitive M&A environment. "We had a 100-day plan. These are all the things we need to do to make it successful," Latham said of a recent integration.
He noted that the post-deal transition period can make or break the value of an acquisition. "I've been at organisations where you lose people, you lose clients, and you lose the essence of why you bought that business."
Cultural alignment is also key, not just in the immediate merger, but in what comes next. "You might think you’re selling to the right environment, but if that company sells again, the whole landscape changes," he said.
With fewer straightforward acquisition targets, firms are increasingly experimenting with alternative deal structures. Partial acquisitions, deferred transactions, and joint ventures are now part of the mainstream M&A toolkit.
"We've asked firms if they'd consider letting us take a minority interest now and revisit a full sale in a few years," Latham said. Such approaches can give sellers time to prepare while offering buyers a clear route to control.
Still, most acquirers ultimately aim for full ownership. "Ultimately, most acquirers want to hold 100% of the stock. So any partnership has to be a route to that," he said.
Even as deal strategies evolve, the overall M&A landscape is constrained by both capital and supply. "Some of the debt on balance sheets is significant. It's a real task to service it," Latham said.
The rise of appointed representative (AR) models is also changing the shape of competition, with new entrants altering who can acquire and how. Yet the number of independent firms with meaningful scale continues to decline. "Maybe we still have 3,000 brokers left in the UK. Ten years ago, it might have been 10,000," he said.
Amid that consolidation, mid-sized firms now occupy a pivotal space, large enough to access resources and markets once reserved for global players, yet still close enough to clients to maintain personal relationships and agility. It’s a position that may increasingly define the next chapter of M&A in the UK insurance sector.
