Research
In this sample of our research from Insurance Insider US, you’ll see how our in‑house team identifies structural shifts before they become consensus — for example, charting multiple compression from 17.9x to 16.0x as broker growth normalised, and linking it to falling organic growth and softening commercial lines pricing. This is the kind of independent, model‑driven insight subscribers rely on to understand where the market is heading, not just where it’s been.
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Investors recalibrate their expectations for the segment as the soft market approaches.
Key points
Broker stocks have fallen from five-year highs in the past year as organic growth returns to pre-supercycle levels, resulting in sharp sell-offs post earnings
AJ Gallagher and Brown & Brown's stock price growth since 2020 peaked at over +200% in March, but has since fallen over 100ppts. Marsh McLennan's gains narrowed by about 55 ppts, and Aon's by about 30ppts
Multiples have compressed to pre-pandemic levels from 17.9x in 2024 to 16.0x in 2025 as investors recalibrate their earnings expectations for the segment and broader P&C industry ahead of the soft market
Lower private-broker multiples historically allowed public brokers to issue high-value equity and make accretive acquisitions; with multiples compressing, that arbitrage is narrowing and becoming a weaker growth lever
Over the past few months, we have discussed the normalization of growth and investor expectation reset that has been taking place within the publicly traded broker cohort in the P&C industry.
This has been fueled by a broader slowdown in commercial lines pricing as the soft market approaches.
Specifically, pricing pressures as well as heightened competition, particularly within large account business and property lines, has led to softer-than-expected top line growth.
Underlying margins among insurers additionally showed signs of year-over-year deterioration. These developments have culminated in an increasingly negative outlook on the P&C industry as market conditions worsen.
With the soft market approaching, we decided to look at the stock moves and multiples of the publicly traded broker cohort as well as other metrics to explore how far the cohort has fallen to date from prior highs.
We found that stocks and multiples have fallen from five-year peaks in the past year as investor sentiment towards the segment and broader industry sours.
Declining rates have placed downward pressure on organic growth, leading to consensus estimate misses in recent quarters and, consequently, sharp sell-offs post-earnings.
Moreover, an analysis of estimated enterprise value to Ebitda ratios shows 2025 multiples are likely to have compressed from 2024 levels by the time the year is out, as investors re-evaluate the segment.
The softening of the commercial lines pricing environment and subsequent stock sell-offs over the past year reaffirm our view that the glory days of the hard market and brokerage supercycle are firmly behind us. As such, multiples will continue to compress as investors adjust accordingly.
Organic growth has slowed as rates soften, translating to sell-offs in recent quarters
The chart below provides an alternative view of group-level organic growth for our select publicly traded broker cohort.
It should be noted that while organic growth can influence stock price moves, there are other factors at play, including margins and other company-specific developments such as M&A or expense management programs.
We can see that the stocks have struggled over the past few quarters as growth walked down from the prior highs of the brokerage supercycle, during which favorable pricing conditions facilitated consistent organic growth in the high-single digit to low-teens range.
The walkdown led to Street consensus estimate misses, translating to sell-offs. Last quarter, the cohort sold off by a median of 5% following underwhelming growth reports, with only Aon having meaningfully surpassed growth expectations.
Since January, the cohort has sold off by a median of about 14%. We will discuss the broader sell-off over this past year in the following section.
As previously mentioned, these shifts have gone hand-in-hand with the broader commercial lines pricing slowdown we have been observing this past year. Our updated pricing heatmap is shown below.
So, with falling pricing, investors have had to recalibrate their expectations for not only the brokers, but the P&C industry altogether.
The brokerage supercycle is truly over, and with the soft-market on the horizon, the industry’s glory days are behind us.
We will now look more closely in the following sections at the stock price shifts over time versus our select cohorts and benchmark indices. We will then look at multiples to see how the normalization of growth has impacted the segment’s valuation.
Broker stocks have tumbled over 2025
The chart below provides a more detailed view of how our select publicly traded broker cohort’s stock prices have grown over the past five years.
Note that the vertical lines denote the beginning of the period. For example, the line above 2021 indicates the beginning of that year. Additionally, there have been various geopolitical and economic developments over the past five years that have contributed to some of the volatility shown below.
We have discussed a number of those events that occurred this past year in our prior stock-check ins.
AJ Gallagher and Brown & Brown continue to lead the pack in terms of stock price growth. Both companies’ stock prices have grown over 100% since 2020.
This is down significantly from growth in excess of 200% since 2020 in mid-to-late March, shortly before the tariff announcement and subsequent sell-offs as well as the first quarter earnings releases.
Note that Brown & Brown and AJ Gallagher were two of the highest performing brokers throughout the supercycle, often outperforming the other publicly traded brokers on group-level organic growth.
AJ Gallagher has traded up the strongest, reflective of the firm’s comparatively outsized growth.
As this publication previously discussed in a prior note on the broker’s success, AJ Gallagher’s revenue has grown rapidly over the decades and is more than 3x 2014 revenues, even when excluding the AssurredPartners acquisition.
Marsh McLennan was similarly up over 100% this past March from its stock price at the beginning of 2020, following numerous periods of estimate beats and strong organic growth. The stock is now only up about 64% from 2020, marking a significant fall-off.
Despite this, all brokers except WTW continue to outpace the State Street S&P Insurance ETF, which we have featured as a proxy for the broader industry.
The S&P 500 continues to steadily grow despite setbacks throughout the year, having grown over 100% since 2020, outpacing all brokers except AJ Gallagher.
This comeback is reflective of a broader shift in investors’ perspective on the P&C industry as market conditions become increasingly challenging, making insurer and broker stocks less attractive versus other sectors.
One other way in which we can analyze the stock price shifts is at the cohort level. The table below highlights the median annual price shift for our broker cohort and compares it to other segments as well as our IIUS Select composite.
Brokers experienced notable stock price growth throughout the 2020s, outpacing the IIUS Select composite three out of the past five full years. However, year-to-date, the brokers have fallen significantly, which is in line with what we observed in the prior chart.
Forward-looking estimates forecast multiple compression to pre-pandemic levels for 2025
Multiple compression is also a development we have been observing this past year. We initially forecasted this in our prior note on investor sentiment.
In it, we argued that negative pricing commentary, macro headwinds and reserve pressure would incite investors to re-evaluate the industry ahead of a decline in earnings expectations.
As the chart below shows, this has come to pass. The 2025 estimated median enterprise value to Ebitda ratio for our select cohort now sits at 16x, roughly in-line with pre-pandemic levels.
We have previously discussed the implications of multiple compression for the publicly traded brokers, particularly as it relates to M&A arbitrage in the slow-growth environment.
Because private brokers operate at relatively lower multiples, issuing equity at high valuations to acquire these businesses is immediately accretive to the publicly traded brokers.
However, with valuations cratering as investors redefine their expectations for the segment, the efficacy of this strategy is diminishing over time, further complicating these brokers’ growth prospects.
In summary, broker stocks have fallen from five-year highs and multiples have compressed as growth normalizes ahead of the impending soft market. We expect multiples to continue to compress as softening rates and stock sell-offs confirm that this segment’s glory days are well and truly over.
By Noah Marchese, Amit Kumar, Henry Meiners
December 09, 2025