How is M&A changing in the Canadian brokerage space?

Merger and acquisition (M&A) activity in the Canadian P&C brokerage industry slowed in 2025, but demand for strong brokerages has not changed, advisory firm Smythe LLP says in a recent blog.

In 2025, 75 transactions were publicly announced during the year, the lowest level since 2022. But the headline numbers only tell part of the story, Smythe says.

“This reflects a market that has become more selective, with fewer high-quality brokerages available and more discipline around what buyers are willing to pursue,” the firm says. “Owners of well-run businesses continue to attract interest, while others are finding the market more challenging than it was a couple of years ago.”

It’s also important to note that many transactions are never publicly announced, particularly smaller deals and ‘tuck-ins,’ the M&A update says. “Based on our conversations across the market, overall activity is likely higher than public deal counts suggest.”

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After several years of rapid consolidation, the supply of attractive brokerages has tightened. This means buyers are spending more time upfront, passing on more opportunities, and focusing their efforts where there is a clear strategic fit, Smythe reports.

This has led to fewer announced deals, but not a quiet market. “Buyers remain active, just more focused.”

How prepared a brokerage is when it comes to market is also important. Owners of well-run brokerages typically saw multiple conversations, competitive interest, and flexibility around timing and structure. But brokerages with heavier owner reliance, less clarity around growth, or more operational complexity often saw fewer buyers engage and less room to shape the outcome. 

Who’s buying?

Private equity-backed national consolidators continue to account for the largest share of transactions, in part because there are simply more of them and acquisitions remain central to their growth, Smythe reports. These consolidators, both private equity and insurance company backed, have been the buyers willing to pay the highest prices, and they have largely been responsible for driving valuation levels across the industry. 

Simultaneously, several long-time consolidators appear to be slowing their pace slightly. They remain active but are buying fewer brokerages per year than at their peak. “Integration capacity, internal focus, and discipline are now playing a larger role in decision-making,” Smythe says.

As for location, publicly announced transactions continue to be concentrated in Ontario and Alberta. This largely reflects where national consolidators have focused their acquisition efforts, rather than a lack of activity in other provinces, Smythe says.

In markets where regional and local brokerages are buying more actively, transactions are less likely to be publicly disclosed, the advisory firm adds. As a result, provincial deal counts tend to understate overall activity outside of Ontario and Alberta. 

Pricing outcomes

When it comes to pricing, a key driver is who is interested in a given brokerage. “When a brokerage attracts interest from one or more consolidators, pricing and deal flexibility tend to increase meaningfully,” the M&A update says. “When consolidators are not interested, the buyer pool often shifts to regional or local brokerages, where pricing expectations are materially lower.”

This is simply because regional and local brokerages simply cannot compete with the pricing levels of national consolidators, given differences in scale, capital and growth models.

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“One pattern we continue to see is that owners who engage the market on their own terms tend to have very different conversations than those who wait until a decision is forced by age, fatigue, or internal pressure,” Smythe adds. “In the former case, owners retain flexibility around timing, role, and partner fit. In the latter, options tend to narrow quickly, even when the broader market is healthy.”

Commercial vs. personal lines

Despite softening insurance markets, commercial brokerages remain in higher demand than personal-lines-focused firms, reflecting the complexity of the work and the strength of client relationships. However, softer markets are affecting financial performance, which means that while pricing frameworks remain strong, total transaction values can be impacted by lower recent earnings, Smythe says.

On the other hand, demand for smaller, personal lines focused brokerages is weakening, even though hard market conditions are still driving growth in financial performance. Scale and strategic fit are becoming more important factors in determining buyer interest in this segment. 

For brokerage owners, the message is straightforward, Smythe says. “Strong brokerages continue to attract interest and choice. Others are finding the market less forgiving than it once was.”

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.