Industry M&A “knows no end.” What that means for smaller brokerages

Merger and acquisition activity in both the Canadian brokerage and insurer spaces continues unabated, as noted by Matt Studley, recently appointed president of Hub International’s Ontario and Atlantic regions.

“Industry consolidation just knows no end,” he says in an interview with Canadian Underwriter.

“You’re seeing it on the insurer side. You’re seeing it on the brokerage side. So, I think a lot more of that consolidation is going to come.

“I think it’s going to be more and more challenging for some of the mid-market or smaller brokers who don’t have the same level of scale to continue to compete,” he says, acknowledging that these brokerages are important due to the relationships they have, particularly in local communities.

For Hub, it’s a matter of striking a strategic balance between supporting local relationships and communities, providing local autonomy in terms of management decision-making, and providing global product and industry expertise.

“Bringing those resources that a global broker has into those communities could have a lot of value,” Studley says. “And I don’t think that’s gone anywhere near as far as it will over the next five to 10 years.”

He made his comments during a wide-ranging discussion of commercial lines trends, including ‘tariff washing’ (related to a company’s disclosure over the impact of tariffs on their business), M&A, reinsurance renewals and the softening commercial lines market.

Already this year, a number of Canadian brokerages have already announced deals, including Westland, SIB Corp. (StoneRidge Insurance Brokers) and BrokerLink. The $7.2-billion mega-merger between Acera and Navacord closed Feb. 2 and Zurich’s possible offer for Beazley (to be based in the United Kingdom) is estimated at about $15 billion in gross written premiums.

For M&A deals in general, whether they involve insurers or brokers, Studley says the question is where and how operations can be integrated.

Speaking about the Jan. 1, 2026 reinsurance renewals, they “seem to have gone off quite easily, without a hitch,” Studley reports.

Last year, Canada saw $2.4 billion in insured losses,  less than one-third of the record-breaking 2024 total of $9.1 billion.

But it will be interesting to see what impact large losses could have on ‘direct’ reinsurance rates, Studley suggests. He notes many reinsurers and insurers are using structures such as sidecars to address losses that used to hit the direct P&C market. “When you have structures like that, how much of that risk, even when there’s a material loss, is going to flow through retail P&C rates?” he asks. “Time will tell.”

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Of course, commercial lines like D&O and cyber have been “softening aggressively” for many quarters. “I think on some [commercial lines] you could start to see…flattening this year,” Studley says. “It’s a function of long-tail liability in any of these products.”

However, large losses in the system could also drive rate increases, he adds.

That said, it’s still too early to say when the softening commercial market could change. “I think anybody who’s going to call absolute bottom on a soft market is likely going to look foolish 99.9% of the time.”

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.