The retail insurance brokerage market comprises businesses that act as intermediaries between insurance underwriters and end-clients, either through traditional channels (e.g. physical branches, phone, e-mail), online or a combination of these. As such, we segmented the European market into: (i) offline, (ii) online and (iii) omnichannel.

The European market has a fragmented but top-heavy nature, comprising global giants (e.g. Marsh McLennan, Aon, Willis Towers Watson), local champions (e.g. Söderberg & Partners) and a long tail of small, local players. Industry experts (interviews by Gain.pro) indicate that the market is poised for further consolidation, mainly driven by buy-and-build strategies of PE portfolio companies as well as the rising administrative burden for small incumbents from increased regulatory requirements that are pressuring their ability to maintain healthy OPEX levels in the long run.

Sponsor-led interest has been high, with ~70% of identified assets being backed by financial sponsors (December 2022). Interest is mainly driven by the market’s non-cyclical nature and stable cash flows, as well as the evident potential for buy-and-build plays. The global top-5 insurance brokers were valued at ~18.3x EBITDA in 2021, with brokers generating >$20m revenue reaching valuations of >15x EBITDA and smaller players (~$3-10m sales) selling at EBITDA multiples of ~12.0x.

ESG topics primarily relate to potential social and governance issues. Although the insurance sector does not have a significant impact on the environment, it is significantly affected by environmental events (e.g. floods, earthquakes). In terms of social responsibility, incumbents are required to eliminate any form of discrimination and need to correctly and extensively inform (potential) clients about their insurance policies. Lastly, potential governance-related issues primarily relate to unlawful, misleading commercial practices (e.g. at SFAM in 2019).