The United Kingdom's insurance distribution sector recorded 99 mergers and acquisitions in 2025, falling short of 100 announced deals for the first time since 2017, according to MarshBerry.
December 2025 saw only four new transactions, making it jointly the quietest month of the year for sector M&A and the slowest December since 2016. This outcome came despite the month historically performing in line with other periods, averaging more than eight deals monthly over the past decade.
MarshBerry noted that unlike other markets, the UK lacks tax-driven incentives to close deals by year-end. The fourth quarter proved particularly subdued, with only 22 announced deals making it the quietest Q4 for sector M&A since 2016.
Deal sizes also declined during the year. More than half of the 99 transactions involved targets employing fewer than 10 staff, while only five deals exceeded £100 million in value—the lowest count since 2019.
Overall M&A value across 2025 is expected to fall well below the average of around £4 billion recorded over the past three years. MarshBerry estimated that around two-thirds of deals were valued below £5 million, the highest proportion in five years.
MarshBerry pointed to both supply and demand factors behind the slowdown. The firm noted there are fewer mid-sized targets available for consolidators, while a softening rate environment has removed a multi-year tailwind from the sector.
Despite the broader slowdown, specialty intermediaries including Lloyd's brokers and MGAs accounted for 23% of deals in 2025, the highest share in five years. MarshBerry noted these firms continue to attract acquirer interest due to growth potential and ongoing demand from private equity and overseas buyers.
Looking ahead to 2026, MarshBerry suggested there are no immediate catalysts likely to push deal activity back to 2023/24 levels. However, the sector retains capital awaiting deployment, with three UK commercial broking consolidators securing new private equity backing in 2025.
