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

[Castanza]

52 minutes ago, Spekulatius said:

I certainly do, but I wonder what caused the selloff to begin with. The headline numbers looked Ok. The CC transcript seems Ok too but management commentary is not very promotional. The Accession acquisition seems to go alright. It does look like the report caused the sector to turn south.

 

Anyways, I bought more BRO and also a bit more AON today.

Yeah I’m not understanding it either…I guess we will see when AJG reports in a few days. 

[dwy000]

14 hours ago, Castanza said:

Yeah I’m not understanding it either…I guess we will see when AJG reports in a few days. 

Fire sale continues.  Didn't think id get the chance to add at $80 but here we are (and i did) 

[Hektor]

Rookie question: All these brokers on sale seems to yield 3-5% at the current price. I understand there is some stickiness to the business and the capex needs are negligible. Is the thesis that they will continue to grow (organically and by rolling up the fragmented market) decently for the foreseeable future?

[rogermunibond]

There's evidence this is junk stock/high beta rally from pod shops and quant HFs.

 

Dumping quality compounders.  Look around the S&P 500.  It's not just insurance brokers.

[dealraker]

7 minutes ago, dwy000 said:

Fire sale continues.  Didn't think id get the chance to add at $80 but here we are (and i did) 

No criticism you here dwy000...just sorta saying I'd probably not call this a "fire sale" as in 2015 or so for instance AJG fell to 15 times earnings on the standard 'rate' concerns.  But given the sustainability these brokers have produced now for some decades I would call the stocks falling 20-30% highly likely to be a decent time to buy.

 

One of the things that's a problem with someone (like me in this case) who is vastly overweighted with broker stocks is that I just kind of mess around when the stocks fall.  I didn't buy more AJG in 2015 but strongly recommended to others to buy it.  This time I've bought some the brokers today including AON and AJG.  AON's a bit below where I bought it a few months ago as is WTW.   

 

Wells has only slightly, ever so slightly, lowered BRO's earnings predictions through 2027.  Yet they've lowered their expectations quite a bit stating their belief that BRO will struggle with organic more that the others.  But thus far the settings seems far away from desperate or anything of the sort.

 

I think we all knew this was coming and honestly glad that it is in process.  What will the stocks do?  Crowd behavior!  That's what!

[pricingpower]

On 10/23/2025 at 12:44 PM, Eldad said:

I’m getting like a 6.75x EBITDA multiple for what BRO pays for acquisitions. Is that close to what you longterm holders have observed?

BRO's  $9.8bn Accession deal that closed in August was done at like ~21x trailing EBITDA (9.8bn/476mm) or ~12x under their adjustments (mainly 130mm cost cuts + 20mm additional revs and adjusting price for 600mm DTA's)?  Arguably they paid a bit less as they funded part of the deal by issuing $4bn of stock in June at 102 which is trading at 80 now... so maybe 10-11x?  That was a large acquisition relative to their size, at a glance looks like it equals all their cash acquisitions over 2004-2024.

[Eldad]

3 minutes ago, pricingpower said:

BRO's  $9.8bn Accession deal that closed in August was done at like ~21x trailing EBITDA (9.8bn/476mm) or ~12x under their adjustments (mainly 130mm cost cuts + 20mm additional revs and adjusting price for 600mm DTA's)?  Arguably they paid a bit less as they funded part of the deal by issuing $4bn of stock in June at 102 which is trading at 80 now... so maybe 10-11x?  That was a large acquisition relative to their size, at a glance looks like it equals all their cash acquisitions over 2004-2024.

Thanks

[dealraker]

On 10/29/2025 at 10:30 AM, Hektor said:

Rookie question: All these brokers on sale seems to yield 3-5% at the current price. I understand there is some stickiness to the business and the capex needs are negligible. Is the thesis that they will continue to grow (organically and by rolling up the fragmented market) decently for the foreseeable future?

I'd say in general somewhere over 5% at today's prices on average.  That's free cash flow multiples too which is of course relatively high compared to the market.  Growth?  Growth is of course slower and particularly the more recent past.  

[Hektor]

19 minutes ago, dealraker said:

I'd say in general somewhere over 5% at today's prices on average.  That's free cash flow multiples too which is of course relatively high compared to the market.  Growth?  Growth is of course slower and particularly the more recent past.  

Thanks for the response @dealraker. Why settle for 5%? Why not wait for a better entry? Is the reasonable expectation that growth will accelerate is the near to medium future?

[gfp]

AJG results out.  Market doesn't like 'em so far

 

https://www.prnewswire.com/news-releases/arthur-j-gallagher--co-announces-third-quarter-2025-financial-results-302600340.html

[dealraker]

1 hour ago, gfp said:

AJG results out.  Market doesn't like 'em so far

 

https://www.prnewswire.com/news-releases/arthur-j-gallagher--co-announces-third-quarter-2025-financial-results-302600340.html

AJG is gong to rock.  Choose what amount you are comfortable owning and hold it.  

 

Edited October 30, 2025 by dealraker

[Junior R]

On 10/29/2025 at 10:41 AM, dealraker said:

No criticism you here dwy000...just sorta saying I'd probably not call this a "fire sale" as in 2015 or so for instance AJG fell to 15 times earnings on the standard 'rate' concerns.  But given the sustainability these brokers have produced now for some decades I would call the stocks falling 20-30% highly likely to be a decent time to buy.

 

One of the things that's a problem with someone (like me in this case) who is vastly overweighted with broker stocks is that I just kind of mess around when the stocks fall.  I didn't buy more AJG in 2015 but strongly recommended to others to buy it.  This time I've bought some the brokers today including AON and AJG.  AON's a bit below where I bought it a few months ago as is WTW.   

 

Wells has only slightly, ever so slightly, lowered BRO's earnings predictions through 2027.  Yet they've lowered their expectations quite a bit stating their belief that BRO will struggle with organic more that the others.  But thus far the settings seems far away from desperate or anything of the sort.

 

I think we all knew this was coming and honestly glad that it is in process.  What will the stocks do?  Crowd behavior!  That's what!

Whats your % weight of insurance broker  in your portfolio

[dealraker]

9 hours ago, Junior R said:

Whats your % weight of insurance broker  in your portfolio

I have owned AJG, BRO, MMC, and AON since 1994.  Brokers are not far from 50% of my portfolio.  My two business partners and I merged with AJG in 1994.  

 

I've bought WTW a few times in the last few years and RYAN recently.  I also have a bit of BWIN (ouch LOL!). 

[dealraker]

17 hours ago, Hektor said:

Thanks for the response @dealraker. Why settle for 5%? Why not wait for a better entry? Is the reasonable expectation that growth will accelerate is the near to medium future?

Hektor you simply think far-far-far differently than I do!  I've spent the last 40 years of my 50 buying what I think are the best businesses when they've sold for a 5% earnings yield.

 

We have a market!

Edited October 31, 2025 by dealraker

[Junior R]

22 minutes ago, dealraker said:

I have owned AJG, BRO, MMC, and AON since 1994.  Brokers are not far from 50% of my portfolio.  My two business partners and I merged with AJG in 1994.  

 

I've bought WTW a few times in the last few years and RYAN recently.  I also have a bit of BWIN (ouch LOL!). 

lol thanks is your long term goal to keep brokers around 50%...only one thing is they pay under 1% div lol

[dealraker]

19 minutes ago, Junior R said:

lol thanks is your long term goal to keep brokers around 50%...only one thing is they pay under 1% div lol

Junior dividends are so far from my scope of importance that they register a giant minus.  I am interested in business, NOT stock prices nor dividends or much of anything of that sort.  And I have even less interested in buying/selling other than in one small account where I do try to amuse myself.

 

I'm not a Parsad, I never load up on a few stocks.  That's his skill, not mine...and he is exceptional.  I buy businesses and over time some do very well and I do not sell them if the business is a good one.

 

The best investor trait of all is to know who you are and what you can do or tolerate, and even better to know who you aren't.  The slogan, "When you look in the mirror do you see Warren Buffett?"  That's the one for me.

Edited October 31, 2025 by dealraker

[Junior R]

1 minute ago, dealraker said:

Junior dividends are so far from my scope of importance that they register a giant minus.  I am interested in business, NOT stock prices nor dividends or much of anything of that sort.  And I have even less interested in buying/selling other than in one small account where I do try to amuse myself.

Thanks what sectors is the other 50% in...this is the type of stocks to buy the ones you can keep for a long period of time lol

[dealraker]

5 hours ago, Junior R said:

Thanks what sectors is the other 50% in...this is the type of stocks to buy the ones you can keep for a long period of time lol

OK, I see where you are.  So let me sling out something.  So things I own a lot of, and "a lot" means that at whatever percentage of my portfolio they dominate the portfolio.  

AJG

BRKA

Fairfax

Meta

Google

Bro

Aon

Marsh McLennan

Pepsi

Coke

Mondelez

Hershey

Lowe's

Norfolk Southern

CSX

UNP

Canadian National

Canadian Pacific Kansas City

Intercontinental Exchange

CME Group

Nasdaq

Amrize

Martin Marietta

Vulcan

St. Joe

Republic Services

Waste Management

 

Right off hand that's my list and there's probably a couple not on there.  This would be 99% of my publicly traded stuff.

 

Edited October 31, 2025 by dealraker

[Junior R]

3 minutes ago, dealraker said:

OK, I see where you are.  So let me sling out something.  So things I own a lot of, and "a lot" means that at whatever percentage of my portfolio they dominate the portfolio.  

AJG

BRKA

Fairfax

Meta

Bro

Aon

Marsh McLennan

Pepsi

Coke

Mondelez

Hershey

Lowe's

Norfolk Southern

CSX

UNP

Canadian National

Canadian Pacific Kansas City

Intercontinental Exchange

CME Group

Nasdaq

Amrize

Martin Marietta

Vulcan

St. Joe

Republic Services

Waste Management

 

Right off hand that's my list and there's probably a couple not on there.  This would be 99% of my publicly traded stuff.

 

Nice thanks...I am at the point where i am going transition high % to long term assets vs buying and selling....this way I can lower taxes but if opportunity pops up will keep buying undervalued companies and sell when they become fairly valued

 

goal is to have

core portfolio (currently FFH + JOE + APO)

+ 

short term (less than 3 years) portfolio 

 

my worry is to much short term trades say avg + six months can cause issue with the tax man ...

 

[dealraker]

Just now, Junior R said:

Nice thanks...I am at the point where i am going transition high % to long term assets vs buying and selling....this way I can lower taxes but if opportunity pops up will keep buying undervalued companies and sell when they become fairly valued

 

goal is to have

core portfolio (currently FFH + JOE + APO)

+ 

short term (less than 3 years) portfolio 

 

my worry is to much short term trades say avg + six months can cause issue with the tax man ...

 

I am 71 and that's old as to investing insight.  Regardless of what other say, my view is that while it is unique to the individual there is a point where you are no longer competitive or as interested/motivated as to where you once were.  I am way into this phase.  If I were younger I'm quite sure my investments would be different.

[Junior R]

1 minute ago, dealraker said:

I am 71 and that's old as to investing insight.  Regardless of what other say, my view is that while it is unique to the individual there is a point where you are no longer competitive or as interested/motivated as to where you once were.  I am way into this phase.  If I were younger I'm quite sure my investments would be different.

Thanks again for your wisdom

[dealraker]

Bought more Aon yesterday, I thought I had another day to buy before earnings.   Earnings out and they look quite good.   But last quarter they were solid too and the stock sold off heavily.  We will see. 

[Hektor]

1 hour ago, dealraker said:

Hektor you simply think far-far-far differently than I do!  I've spent the last 40 years of my 50 buying what I think are the best businesses when they've sold for a 5% earnings yield.

 

We have a market!

Thanks @dealraker and everyone on this thread. These posts help understand the brokers. I guess, for me, it is more reading to better understand these businesses.

[73 Reds]

55 minutes ago, dealraker said:

I am 71 and that's old as to investing insight.  Regardless of what other say, my view is that while it is unique to the individual there is a point where you are no longer competitive or as interested/motivated as to where you once were.  I am way into this phase.  If I were younger I'm quite sure my investments would be different.

Hits very close to home.  Despite a lot of good ideas and thoughts here on this Board, I am content holding mostly the same stocks I've owned for decades unless something literally hits me over the head and screams "Buy!" like Fairfax (thanks Viking) a number of years ago.  JOE was another one and having followed it forever, needed someone like Greg to demonstrate the future opportunities there that are just too hard to resist.  Otherwise, the marginal potential upside in spending a lot of time researching and trading in and out is simply not worth the effort for this poster.

Edited October 31, 2025 by 73 Reds
word

[villainx]

1 hour ago, dealraker said:

Right off hand that's my list and there's probably a couple not on there. 

 

I wonder how much you can tell about a person based on the portfolio.  Especially assuming Lynch's buy what you know/use.  I'm looking at the Pepsi, Coke, Mondelez, and Hershey.