The Global Insurance Broker Industry: Should you bother?

When a Bridge Fell at Dawn

At 01:28 on March 26 2024, the Singapore‑flagged containership Dali lost power and slammed into a support pier of Baltimore’s Francis Scott Key Bridge. In less than twenty seconds the 1.6‑kilometre span folded into the Patapsco River, sealing the Port of Baltimore and jolting global supply chains awake.

Within sixty minutes WTW — the lead broker on the bridge’s US$1.4 billion property programme — had mobilised a rapid‑response claims team and secured site access for loss adjusters, acting as air‑traffic control between Maryland officials, Chubb (the lead underwriter) and a mosaic of Lloyd’s reinsurers.

By dawn, Aon’s marine‑liability unit was mapping the exposures of the vessel’s owners, while Marsh’s specialty marine desk in London was scoping knock‑on losses for hundreds of stranded ships — work that would seed a US$50 million “port‑blockage” facility launched five months later.

The choreography of those first twelve hours — three rival brokers, dozens of carriers and an alphabet soup of reinsurers moving in near‑real‑time — crystallised why, in the age of poly‑crisis, insurance brokers remain the connective tissue of global risk distribution. Their backstage power seldom makes headlines. But when a bridge falls at dawn, it is the brokers who pick up the phone first.

The Global Pool of Risk

Over the past fifteen years the insurance industry’s capacity to absorb risk has quietly but dramatically enlarged, mirroring – and in some cases out‑running – global GDP growth. According to Swiss Re Institute’s sigma series, worldwide gross written premiums (life, non‑life and health combined) climbed from roughly US$4.0 trillion in 2010 to an estimated US$7.2 trillion in 2024, a compound annual growth rate (CAGR) of 3.9 % in real terms.

Emerging markets generated a whopping 53 % of incremental premium between 2015 and 2024, led by mainland China’s pivot from savings‑type life products to protection‑led covers, and Brazil’s agribusiness boom.

Cyber risk premium ballooned from US$3 billion in 2010 to US$15 billion in 2024, while renewable‑energy construction covers more than doubled, mirroring the surge in offshore wind.

Global natural‑catastrophe losses averaged US$180 billion annually over the past five years, yet only 45 % were insured. In Asia the gap is wider: just 18 % of 2023 nat‑cat losses were covered. Brokers argue that closing even half that gap would require another US$1 trillion in annual premium, underscoring the runway ahead.

As risk pools swell and diversify—into cyber grids, space‑launch guarantees, parametric drought covers—brokers become the translators between capital and exposure. Scale furnishes the data, but a bigger pool furnishes the canvas on which those data paint.

The Brokers of Global Risk

Marsh McLennan (MMC)

From its Midtown Manhattan tower, Marsh McLennan orchestrates the world’s biggest risk‑placing machine. The Marsh retail arm negotiates roughly $75 billion in annual premium, Guy Carpenter dominates treaty reinsurance, while Mercer and Oliver Wyman pull the firm upstream into board‑level strategy. That four‑cylinder engine lets MMC harvest data across the life‑cycle of risk—design, placement, capital and human capital—creating feedback loops no single‑line rival can mimic.

Aon plc (AON)

Born in Chicago but legally domiciled in Dublin, Aon has spent a decade collapsing silos under the “Aon United” banner. The streamlined structure funnels every client into one integrated platform spanning risk, health and wealth. Aon’s prized artefact is its multi‑terabyte loss‑forecasting corpus, refreshed daily from $450 billion of premium flow—raw material for its rapidly growing capital‑markets franchise, which placed $12 billion of catastrophe risk in 2024 alone.

WTW plc (WTW)

WTW—still colloquially “Willis” on Lime Street—marries brokerage heritage with actuarial muscle. Its Corporate Risk & Broking arm handles the likes of Airbus and TotalEnergies, while its Benefits segment advises 90 % of the Fortune 100 on pensions and health. Post‑breakup from the aborted Aon merger in 2021, WTW has doubled down on analytics platforms such as Radar and Climate Quantified to regain share and margin.

Arthur J. Gallagher (AJG)

Gallagher is the industry’s most prolific acquirer, averaging one deal every four days since 2018. Yet 70 % of its organic growth still comes from feet‑on‑the‑street producers in middle‑America and Australia. The 2023 acquisition of Willis Re turbo‑charged Gallagher Re, now the world’s third‑largest treaty intermediary, giving the firm a true cradle‑to‑grave risk capability.

Brown & Brown (BRO)

Run out of Daytona Beach, Brown & Brown is the sector’s quiet compounding machine. Every office is a stand‑alone profit centre, fostering an owner‑operator culture that keeps expense ratios lean. The firm’s e‑marketplace, Beecher, funnels small‑business policies end‑to‑end in under eight minutes—an assembly‑line approach that translates local hustle into 30 % operating margins.

Ryan Specialty Holdings (RYAN)

Patrick Ryan—the founder who built Aon—pivoted in 2010 to build a pure‑play wholesale broker. Ryan Specialty sits between retail agents and carriers, charging tolls on hard‑to‑place or distressed risks from crypto‑exchanges to offshore wind farms. Its MGA arm, RT Binding, writes bespoke wordings under delegated authority, giving Ryan a quasi‑underwriting spread without tying up balance‑sheet capital.

The Baldwin Group (BWIN)

Formerly BRP Group, the Tampa‑based consolidator rebranded in 2025 to signal its ambition beyond U.S. shores. Baldwin snaps up entrepreneurial brokers and plugs them into its Mosaic data platform, promising back‑office scale without surrendering local brands. Early results: a 24 % lift in cross‑sell ratio within two years of integration.

Goosehead Insurance (GSHD)

Goosehead applies a “FinTech minus the hype” ethos to personal lines. Its franchise model recruits former mortgage brokers and car dealers, arming them with a proprietary quoting engine that spiders 140 carriers in seconds. The result is a 90 % retention rate and revenue growth north of 30 %—proof that even home and auto insurance can be un‑boring when UX wins.

Steadfast Group (SDF)

Sydney‑based Steadfast invented a brokerage “platform as a service” long before the term was fashionable. It supplies policy wordings, data analytics and wholesale capacity to 418 network brokers who remain independently owned. That capital‑light model yields private‑equity‑like returns while preserving the entrepreneurial flair that clients value. Expansion into the U.S. via the ISU partnership in 2024 signals Steadfast’s ambitions on a larger stage.

Where is the Moat?

Scale & Switching Costs

Marsh McLennan’s 45,000 specialists in 130 countries give it the widest slipstream of capacity and data in the market. Clients with complex towers—energy, aviation, or multinational employee benefits—would face months of re‑engineering to replicate that reach elsewhere: redesigning policy wordings to fit new carriers, re‑credentialing local brokers in dozens of jurisdictions, and rebuilding loss‑history analytics that sit inside the MarshConnect platform.

Those frictions translate into a real‑world bill. MMC estimates that migrating a Fortune 50 programme can cost $6–8 million in legal, actuarial and IT labour before a single premium dollar moves. Even if a rival could shave 50 basis points off brokerage, the pay‑back period stretches beyond five years—longer than many risk managers stay in post—creating an economic moat that compounds with every renewal.

Data Network Effects

Aon’s “Aon United” engine ingests roughly $450 billion in annual premium. That river of data—claims, near‑misses, exposure geocoding—feeds its proprietary Analytics Hub and the AI‑driven Impact Forecasting suite. When a Chilean copper mine floods, Aon’s modellers plug the loss curves into capital‑markets screens and place a contingency cat‑bond within 48 hours, armed with benchmarks no regulator or carrier can match. The network effect is reflexive: the more clients place risk through Aon, the richer the data - and in the age of AI, data is the new gold.

Acquisition Flywheels

Arthur J. Gallagher closes a tuck‑in roughly every four days. Its “merge‑and‑mother” playbook slots producers into Gallagher’s shared service stack—HR, IT, compliance—while leaving local dealmakers free to hunt. Post‑integration surveys show target firms’ hit rates on new RFPs jump 18 % after year one, thanks to the Gallagher brand and carrier leverage. The virtuous loop repeats: improved hit‑rates boost EBIT, which props up an 18× EV/EBITDA multiple, which then finances the next wave of cash‑and‑stock deals. Critics warn of indigestion, but Gallagher’s retention of key principals stands at 93 % three years post‑deal—evidence that the cultural “secret sauce” is stickier than spreadsheets can capture.

Decentralised Hustle

Brown & Brown’s 500‑plus offices run as autonomous P&Ls: branch leaders set pricing tactics, hire producers, and even choose coffee vendors. That freedom channels local market IQ that centralised peers miss. At headquarters, a bare‑bones core of thirty data scientists distils group‑wide placement flows into dashboards that each branch can scan daily—overlaying macro pricing trends on their own loss ratios. The result is a hybrid operating model: Silicon‑Valley‑style data feeds married to Main‑Street‑USA hunter culture. In the 2024 Florida‑CAT renewal season, Brown branches cut average rate hikes to 32 % versus a peer average of 41 %, yet preserved 31 % EBITDAC margins—proof the hustle scales without diluting profit.

Wholesale Gatekeeping

Ryan Specialty occupies a mezzanine layer between retail brokers and carriers, a position often misunderstood by outsiders. Roughly two‑thirds of its placements are “non‑admitted” lines—risks so quirky or distressed that standard carriers refuse to file rates. Ryan’s MGAs, armed with delegated underwriting authority, craft manuscript wordings for, say, crypto‑exchange fidelity or offshore wind‑farm builders’ risk.

Retail agents cannot replicate those facilities overnight: they lack surplus‑lines licences in all 50 states, London Market relationships, and the actuarial bench to price spot risks. Carriers, for their part, prefer Ryan’s volume‑aggregated pipeline to assembling one‑off deals. Thus Ryan collects tolls on both sides of the bridge—and the bridge grows busier as the global risk landscape mutates.

Platform Synergies

Steadfast’s 418 network brokers remain legally independent but plug into the “Steadfast Client Trading Platform,” which offers harmonised policy wordings, real‑time quoting, and bulk‑purchased professional indemnity cover for members. The platform processed A$3.6 billion in GWP last fiscal year, saving members an estimated 180 basis points in placement costs.

The model scales like software: each new broker adds incremental data and carrier leverage while incurring near‑zero marginal cost to Steadfast. That capital‑light dynamic fuels a 42 % ROE—dwarfing most balance‑sheet insurers—and provides a war‑chest for expansion, evidenced by its 2024 entry into the U.S. via the ISU partnership.

The Clash of Titans

For most of the last century the reinsurance houses of Zurich, Munich and Bermuda called the tune in global risk. Primary insurers were hometown outfits—mutuals in Minnesota, cooperatives in coastal Japan—each too small to negotiate on equal footing with the global reinsurer oligopoly. Rates, terms and even wording innovations were dictated from the lofty vantage point of the reinsurer, whose balance‑sheet girth dwarfed any single cedent.

That asymmetry began to tilt only when the world’s biggest brokers transformed themselves into clearing‑houses of risk. By funnelling thousands of local placements through shared analytics and portfolio structures, Marsh, Aon and WTW now face reinsurers not as scattered petitioners but as mega‑aggregators. The moat is real - and very sticky too.

Or are they really?

No moat lasts forever and business models which such high ROICs are of course constantly under attack. Here are the main threats:

Tech Disintermediation: 2025’s AI‑native carriers are experimenting with end‑to‑end, broker‑free placement for micro‑commercial policies. Yet the big‑ticket catastrophes, from space‑launch guarantees to pandemic BI covers, still need multi‑market syndication—work a spreadsheet can’t charm away.

Capital Markets Encroachment: The insurance‑linked securities (ILS) market surpassed $115 bn in outstanding risk transfer this spring. Brokers helped build that market; they also skim fees off every tranche. The irony: even if alternative capital squeezes traditional reinsurance, brokers’ tolls remain.

Regulatory Rumble: Brussels and Washington are probing contingent‑commission structures after several mid‑size cyber breaches. A cap on fee formats would nick margins, but history shows brokers pivoting to advisory retainers within quarters, not years.

Valuation Gravity: Houlihan Lokey’s April update puts scaled broker EV/EBITDA at 16.5×—a premium to both carriers and the S&P 500. Rich multiples attract insurgents, but they also arm incumbents with cheap equity for the next acquisition spree.

Conclusion

When the suits at Davos fret that the world is “entering a decade of poly‑crisis,” they call a broker before they call a board meeting. That human‑in‑the‑loop, problem‑solving DNA is stubbornly sticky. Technology will graze the margins, regulators will tug at fees, and new capital will reshape who ultimately holds the risk. Yet the core moat—curating global capacity in the nanoseconds after a phone rings at 02:17—rests on relationships, data and trust accumulated over a century.

History suggests those assets erode slowly. In other words: as an investor looking for high quality business models, you should definitely bother about the insurance broker industry. Check out our latest model portfolios and find out which ones make it to the list.