Insurance Brokers (MMC, AON, AJG, WTW, BRO)

[coffeecaninvestor]

BRO’s acquisition of Accession and now higher debt load has kind of kept me from buying.. I’d feel better buying it a little cheaper which might just take time rather than continuing selling pressure. I wouldn’t be surprised if these chop around and create a base while earnings grow and debt comes down especially if operationally things don’t change quickly. I also think it’s pretty clear multiples got a head of themselves and when making acquisitions in an expensive market it compounds issues when it deflates since you likely overpaid for some of those companies. I don’t think the brokers are immune from this despite being great businesses. 

Edited April 19 by coffeecaninvestor

[dealraker]

39 minutes ago, coffeecaninvestor said:

BRO’s acquisition of Accession and now higher debt load has kind of kept me from buying.. I’d feel better buying it a little cheaper which might just take time rather than continuing selling pressure. I wouldn’t be surprised if these chop around and create a base while earnings grow and debt comes down especially if operationally things don’t change quickly. I also think it’s pretty clear multiples got a head of themselves and when making acquisitions in an expensive market it compounds issues when it deflates since you likely overpaid for some of those companies. I don’t think the brokers are immune from this despite being great businesses. 

Yes I think you are thinking wisely, there's other things as to BRO that for a while may impact both earnings and perceptions such as the broker losses/organic stalling and its independent model.  It could very well be that the brokers, relative to Mr. Market, are excellent buys right now but the stock price proving of this comparison may take some time, maybe even a few years to pan out.  If so this is something that's happened in the past so it isn't different.

 

And in the end those high valuations could be justified - as they relate to Mr. Market.  That's happened previously too.  Only time will tell.  

Edited April 19 by dealraker

[Castanza]

1 hour ago, coffeecaninvestor said:

BRO’s acquisition of Accession and now higher debt load has kind of kept me from buying.. I’d feel better buying it a little cheaper which might just take time rather than continuing selling pressure. I wouldn’t be surprised if these chop around and create a base while earnings grow and debt comes down especially if operationally things don’t change quickly. I also think it’s pretty clear multiples got a head of themselves and when making acquisitions in an expensive market it compounds issues when it deflates since you likely overpaid for some of those companies. I don’t think the brokers are immune from this despite being great businesses. 

Yup and they have the pending litigation issues. I’ve added to AJG mostly but I’m pretty full up on insurance unless we see a significant decline from here. More potential catalysts to the downside in this market. 

Edited April 19 by Castanza

[Sweet]

1 hour ago, Spekulatius said:

I have added to SJG rather than BRO because they have outperformed  BRO operationally quite a bit. Also AJG is only a bit more expensive than BRO currently so for me AJG actually looks like  the better deal right now. If Insider ownership is your thing, look at RYAN as well.

What metrics are you looking at Spek?  Bro has grown revenue faster and has a lower multiple.  I thought about a general basket of these but decided also to just go with Bro.  May change my mind though.  I don’t really understand Ryan.

[gfp]

please excuse the blasphemy of including a price chart but I've been surprised by BWIN's outperformance since the general broker group put in their most recent attempt at a bottom.  It couldn't even fill its gap after the earnings pop retracement.

 

Perhaps the strength is due to Baldwin being singled out as more exposed to disintermediation risk because of its perceived exposure to "low complexity" segments (main-street commercial, personal lines, etc) and this "strength" is actually short exposure being caught offsides and covering.  Could be that their perceived weakness around AI disruption risk ended up causing short term outperformance.  

 

 

[Spekulatius]

3 hours ago, Sweet said:

What metrics are you looking at Spek?  Bro has grown revenue faster and has a lower multiple.  I thought about a general basket of these but decided also to just go with Bro.  May change my mind though.  I don’t really understand Ryan.

EV/ Revenue, EV/EBITDA:

 

[benchmark]

56 minutes ago, Spekulatius said:

EV/ Revenue, EV/EBITDA:

 

the multiple expansion of the broker business has been amazing the last 10 years. I'm not sure that they are really cheap today, maybe fair priced.

[Spekulatius]

31 minutes ago, benchmark said:

the multiple expansion of the broker business has been amazing the last 10 years. I'm not sure that they are really cheap today, maybe fair priced.

We are back to 2017/2018 multiples which is not something we can say for the stock market as a whole. The insurance brokers trade at lower multiples than the market , despite being far above average business in general.

[Marco Van Basten]

4 hours ago, Spekulatius said:

We are back to 2017/2018 multiples which is not something we can say for the stock market as a whole. The insurance brokers trade at lower multiples than the market , despite being far above average business in general.

Sure, but you'd be surprised as to how many stocks are trading at 2017/2018 multiples - SPGI/MCO/V/MA are good examples.  

[tnathan]

5 hours ago, Spekulatius said:

We are back to 2017/2018 multiples which is not something we can say for the stock market as a whole. The insurance brokers trade at lower multiples than the market , despite being far above average business in general.

+1 ... sometimes people over-complicate things. If you consistently buy well above average businesses with growth ahead at below market multiples your chance of beating the market is pretty high. Insurance brokerage is one of the better business models there is and the runway is still quite long.

[longterminvestor]

On 4/16/2026 at 4:15 PM, dwy000 said:

Not sure if this is the right place to ask, but this topic does get most of the insurance investors following....

 

I've been doing a lot of reading lately on Lloyd's (the London insurance organization).  My wife looks at this stuff and just shakes her head as its the most boring thing she's ever seen, but I find it fascinating.  Is anyone here a Lloyd's Name or have you participated directly or indirectly in any Lloyd's syndicate?  Or as a broker?  Would love to hear about the background and experience. 

 

Given that (from everything I've read) you dont need to put up cash, you just need to hold or pledge a dollar amount of liquid assets that can still be invested in other things, it's double dipping on income and can be quite lucrative. 

London.  Place will make your head spin for sure.  You can win big or get smoked.  Used to be a boys club.  Still is but corporations have taken all the fun out of selling insurance.  

 

Part of the success is there is no UK CNBC on the floor interviewing brokers and UW's.  They quietly make or lose money.

 

When Mr. Buffett decides to take 5% of everything running through your syndicate, you know you are doing something right.  Love love Loyds, I am heading over there in the Fall for some biz stuff.  Its how business used to be, still stuck in time and may be up-ended with tech but who knows.  Still a place you can get a risk placed if you know who to call and how to get the right people in the room.   

 

Recently upgraded to A+ which should have been for many years.  IF you are researching, understand the concept of Central Committee or Central Fund.  Thats key.  Hint its kinda like FDIC insurance on banks.  

[dwy000]

58 minutes ago, longterminvestor said:

London.  Place will make your head spin for sure.  You can win big or get smoked.  Used to be a boys club.  Still is but corporations have taken all the fun out of selling insurance.  

 

Part of the success is there is no UK CNBC on the floor interviewing brokers and UW's.  They quietly make or lose money.

 

When Mr. Buffett decides to take 5% of everything running through your syndicate, you know you are doing something right.  Love love Loyds, I am heading over there in the Fall for some biz stuff.  Its how business used to be, still stuck in time and may be up-ended with tech but who knows.  Still a place you can get a risk placed if you know who to call and how to get the right people in the room.   

 

Recently upgraded to A+ which should have been for many years.  IF you are researching, understand the concept of Central Committee or Central Fund.  Thats key.  Hint its kinda like FDIC insurance on banks.  

Thanks for that.  The whole concept is really fascinating (as is the history).  There is obviously a lot of money to be made (or lost) and a lot of expertise circling around that block that PE hasn't found a way to digitize, commoditize and take all the margin out of.  But while the concept is fairly simple it's become a very complex organization with a lot of fingers in the pot.  But the success speaks for itself.  

[hasilp89]

10 hours ago, dwy000 said:

Thanks for that.  The whole concept is really fascinating (as is the history).  There is obviously a lot of money to be made (or lost) and a lot of expertise circling around that block that PE hasn't found a way to digitize, commoditize and take all the margin out of.  But while the concept is fairly simple it's become a very complex organization with a lot of fingers in the pot.  But the success speaks for itself.  

any chance you can share some of what you've been reading?

[dwy000]

45 minutes ago, hasilp89 said:

any chance you can share some of what you've been reading?

Its a true rabbit hole so be careful once you start.

 

I got interested after reading an old magazine article about the troubles in the 1990's.  https://www.newyorker.com/magazine/1993/09/20/the-deficit-millionaires

 

That led to an interest in the history etc.  Just finished Lloyds of London: A Reputation at Risk by Godfrey Hodgson which talks a lot about how the structure came together and some of the characters who shaped it.

 

Then the Lloyds of London website is a trove of good info including the annual reports and a lot of the stats.  There's also discussion on becoming a member and the Memeber Agents and what they specialize in. 

 

This was an especially helpful discussion/overview:  https://www.lloyds.com/conning-report

 

There are other books I've skimmed but are repetitive once you get the concept down. 

Edited April 20 by dwy000

[hasilp89]

@dwy000 thanks for sharing!

[benchmark]

Is there a separate thread for AJG? search didn't find anything.

[gfp]

45 minutes ago, benchmark said:

Is there a separate thread for AJG? search didn't find anything.

 

Everybody has generally been using this catch-all thread but there is an AJG thread

 

[benchmark]

19 hours ago, gfp said:

 

Everybody has generally been using this catch-all thread but there is an AJG thread

 

Thanks @gfp. That thread is basically dead. I'm going to ask my question here. Looking at AJG, the biggest risk outside the overall market being soft is the integration of AssuredPartners. What are the things to look for in their report in terms identifying if the integration is on-track or successful? Their investor day presentation say about $160M by the end of 2026, is that the metric? 

[longterminvestor]

On 4/23/2026 at 6:51 PM, benchmark said:

Thanks @gfp. That thread is basically dead. I'm going to ask my question here. Looking at AJG, the biggest risk outside the overall market being soft is the integration of AssuredPartners. What are the things to look for in their report in terms identifying if the integration is on-track or successful? Their investor day presentation say about $160M by the end of 2026, is that the metric? 

Integration risk in the insurance broker biz is simple.  You are not focusing on systems, products, offices, profitability, or new business - the 100% metric for if a deal works is if the people stay - specifically the producers or teams.  Yes, AJG talks about the "Candy Store" which is all the new products AJG will share with AP however AP has some products, due to their size, that AJG likes and wants to use so there is some cross pollination going on.  And yes the overlap of dual roles in accounting or admin will sort itself out and there will be some cost savings by merging 2 offices in the same city/town (could take a few years to let the office leases to tail out) but very simple - the AJG management team is focused on making sure the real producers at AP are happy and will stay on long term, if that's the case, then the "integration worked".  All the computer stuff and accounting "synergies" will figure themselves out.  In many cases, the brokers all use the same computer systems anyway (I am unfamiliar with computer management systems of AJG & AP) however they all are similar in their own way.  

 

Just understand this, AP and AJG were fiercely competing on deals and now they are no longer competing so in a large merger like this one, the clients are the ones that get frustrated because now there is 1 less broker to compete on their business so a "professional" shopper has to now go find a new fish broker to "bid" their business if they think having multiple brokers help get their premium/terms down (everyone has their opinions on that).  Many many times the accounts are so complex the client couldnt even shop their deal if they wanted to.  Not enough capacity in market in some cases to support multiple proposals.  

[dwy000]

Well those BRO results were really quite meh. Given the rest of the industry seems to be enjoying at least some organic growth, to be at zero for 2 consecutive quarters means real underperformance.  

[longterminvestor]

Its hard to "grow organically" when your revenue is tied to premiums that are being reduced due to softening market.  If client paid $1M last year, and this year they pay $500K, revenue will be down 50% however you have a REALLY HAPPY CLIENT.  Which is the goal right, happy clients?  50% reductions are happening for some clients.

 

Fine with results.  More than fine.  Buybacks will be meaningful if there are no targets at their price.  

[Sweet]

2 minutes ago, longterminvestor said:

Its hard to "grow organically" when your revenue is tied to premiums that are being reduced due to softening market.  If client paid $1M last year, and this year they pay $500K, revenue will be down 50% however you have a REALLY HAPPY CLIENT.  Which is the goal right, happy clients?  50% reductions are happening for some clients.

 

Fine with results.  More than fine.  Buybacks will be meaningful if there are no targets at their price.  

Has the purchase of Accession impaired their ability to make future acquisitions?  Balance sheets looks an uglier, even if revenue looks better.  

[dwy000]

5 minutes ago, longterminvestor said:

Its hard to "grow organically" when your revenue is tied to premiums that are being reduced due to softening market.  If client paid $1M last year, and this year they pay $500K, revenue will be down 50% however you have a REALLY HAPPY CLIENT.  Which is the goal right, happy clients?  50% reductions are happening for some clients.

 

Fine with results.  More than fine.  Buybacks will be meaningful if there are no targets at their price.  

How are the other major players showing organic growth ina softening price market (granted most haven't reported the quarter yet but I'm looking at last quarter)

[tnathan]

3 minutes ago, Sweet said:

Has the purchase of Accession impaired their ability to make future acquisitions?  Balance sheets looks an uglier, even if revenue looks better.  

Doesn't really seem like it. Debt / EBITA and Debt as a % of Capital are not concerning. Perhaps smart to take a little bit to digest this properly but cash flow is still strong

[tnathan]

Just now, dwy000 said:

How are the other major players showing organic growth ina softening price market (granted most haven't reported the quarter yet but I'm looking at last quarter)

I think its very line specific. Not all markets are as soft as others.