Why brokerage owners would prefer to sell to local or regional brokerages, but don’t

Many Canadian P&C brokerage owners would prefer to sell their business to a regional or local brokerage as part of their succession planning, says a new report by Smythe Advisory LLP.

But their primary objective to achieve the best value for their brokerage may be working against their preferences, thus prompting them to sell to national consolidators instead, the report says.

Smythe’s 2025 Property and Casualty Insurance Brokerage Report surveyed an unnamed number of broker executives to ask them their succession preferences.

Twenty-four percent said they’d prefer to sell to a local brokerage, while 20% said their preference would be to sell to a regional brokerage. Twenty percent wanted to hand the brokerage down to family members, compared to 17% who preferred to sell to a consolidator.

Only 9% wanted to hand the brokerage over to key employees. And 7% preferred to sell to a private equity firm.

Selling to a local brokerage appeared among the Top 3 preferences for the 72% of the brokerages surveyed. Selling to a regional brokerage appeared in the Top 3 preferences of 83% of brokerages.

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In contrast, selling the brokerage to consolidators only appeared in the Top 3 preferences of just under half of brokerages surveyed.

And yet, brokers doing succession planning are focused on one main objective that gives consolidators an edge — brokerage valuation.   

Sixty-seven percent of brokers said they considered valuation to be the prime consideration in their succession planning.

The next most important consideration in succession planning is to create opportunities for employees and client service, according to 45% of brokers in Smythe’s survey. Thirty-one percent prioritized cultural alignment, and just 25% prioritized family legacy as a top concern.

“These results suggest that while non-financial considerations matter, most owners are placing a premium on deal value,” says the report. “That lens helps explain the continued dominance of national consolidators in actual transactions.

“Even though fewer than half of brokerages included consolidators in their top three preferences, they remain the most frequent buyers. In many cases, local and regional firms simply cannot match the valuations or deal certainty offered by national platforms.

“While owners may begin the process hoping for a more personal or culturally aligned outcome, they often end up choosing the buyer best positioned to meet their financial goals.”

David Gambrill

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