Canadian brokerage M&A is bucking the trend

Brokerage M&A in Canada is bucking the general trend of a slow-down in deal volume, Smythe Advisory LLP reports.

“M&A activity in the Canadian insurance brokerage industry remains strong,” says Smythe Advisory’s 2025 Property and Casualty Insurance Brokerage Report. “Through the first half of 2025, 35 transactions have been publicly announced, consistent with the pace seen in recent years.

“While buyer focus has become more selective, the demand for quality brokerages continues to exceed supply.”

In contrast, several financial and legal experts have noticed the overall number of M&A deals so far in 2025 is declining, largely due to global economic uncertainty.

“The current climate of uncertainty has led many purchasers of Canadian businesses to adopt a cautious stance, delaying investments and expansion plans,” financial firm PwC noted in its June 2025 mid-year Canadian M&A update. “In the period from Jan. 1 to May 31, 2025, there were 996 deals announced in Canada with a total value of $134 billion.

“In that same period, we saw declines in inbound and locally sourced deals in Canada, while acquisitions of companies outside of Canada by Canadian companies increased.”

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Law firm Dentons notes Canadian M&A “entered 2025 under pressure, tariffs on the horizon, inflation still biting and the lowest deal count in two decades.”

Similarly, law firm Bennett Jones noted “the total number of Canadian M&A deals declined in the second quarter of 2025 as tariff disruption and uncertainty hampered dealmaking activity.”

Both Dentons and Bennett Jones observed M&A deal values in Canada increased, despite the decrease in deal volume.

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But where Canadian P&C brokerage M&A is concerned, don’t believe the hype, Smythe Advisory cautions.

“While many sectors have seen M&A activity slow due to broader economic uncertainty, geopolitical risk, or trade related headwinds, the insurance brokerage space has remained remarkably resilient,” Smythe Advisory’s report reads. “Valuations continue to hold at record levels, and investor confidence in the long term fundamentals of the industry remains high.

“This contrast highlights the unique position brokerages occupy in today’s market. They continue to attract strong interest as stable, cash-generating businesses with proven demand and long-term growth potential.”

Buyers are particularly focussed on scale, profitability, and strategic fit. “Larger brokerages and those with niche capabilities remain the most attractive,” Smythe Advisory says. “Strong Interest also persists in the small to mid-sized commercial space, particularly for firms with focus books and capable leadership.”

Buyers have shown less interest in small, personalized, focused brokerages where growth prospects may be limited, unless they have a particular strategic value to the purchaser.

Of particular interest is how the talent war is playing out in the M&A space. One jewel in the crown for buyers is to gain access to a brokerage’s talent and leadership.

“Buyers are paying a premium for brokerages with younger ownership teams who are willing to stay on and roll equity,” Smythe Advisory observes. “These owners bring leadership continuity, growth, capacity and a built-in solution to one of the industry’s biggest challenges: talent.

“For buyers, the ability to retain and develop in-house leadership has become just as valuable as acquiring new clients or revenue.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.