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

[Junior R]

added some BRO

[longterminvestor]

Baldwin merging with CAC.  w...ooo...w

https://www.businesswire.com/news/home/20251202612384/en/The-Baldwin-Group-and-CAC-Group-to-Merge-Creating-the-Largest-Majority-Colleague-Owned-Publicly-Traded-Insurance-Broker

[dwy000]

1 hour ago, longterminvestor said:

Baldwin merging with CAC.  w...ooo...w

https://www.businesswire.com/news/home/20251202612384/en/The-Baldwin-Group-and-CAC-Group-to-Merge-Creating-the-Largest-Majority-Colleague-Owned-Publicly-Traded-Insurance-Broker

Interesting, right as the Westwood earnouts were done and the company should have become cash flow positive. 

[longterminvestor]

Top level analysis - maybe the best "deal" Baldwin has struck.  

 

CAC LTM 2025 revenue of $300M.  Purchase price of $1B ($438M Cash / $589M Stock).  3.33X Revenue.  

 

Tough to suss out true EBITDA because of Baldwins use of use forward looking proforma adjusted numbers.  

 

Lastly, I am personally surprised CAC couldnt get a higher valuation from someone else and Baldwin was the chosen partner moving forward.  Reality sets in here that valuations have 100% come down.   

CAC Group Partnership.pdf

[Munger_Disciple]

Can AI eventually kill all or most of these brokers? Seems like a reasonable bet to me, Most of these people add zero value. 

Same thing happened with full service/online discount brokers.

Edited December 3, 2025 by Munger_Disciple

[villainx]

16 minutes ago, Munger_Disciple said:

Can AI eventually kill all or most of these brokers? Seems like a reasonable bet to me, Most if these people add zero value. 

 

From prior encounter, insurance brokers are pretty necessary.  Insurance company can jack up prices year to year, or have weird requirements, or just refuse to insure, and folks need a person to complain and go shop for new policies.

 

[Munger_Disciple]

4 minutes ago, villainx said:

 

From prior encounter, insurance brokers are pretty necessary.  Insurance company can jack up prices year to year, or have weird requirements, or just refuse to insure, and folks need a person to complain and go shop for new policies.

 

 

A well designed AI app can easily accomplish that with fewer errors than an idiot human. 

Edited December 3, 2025 by Munger_Disciple

[villainx]

Yeah, sure, one of the insurance brokers can have AI interface and get rid of a bunch of brokers.

[Munger_Disciple]

3 minutes ago, villainx said:

Yeah, sure, one of the insurance brokers can have AI interface and get rid of a bunch of brokers.

 

Why can't other startups with just a great app compete & destroy the existing brokers who have basically zero IT skills? This is what happened in the stock brokerage industry. The full service guys had shitty online tools, and many still do, so folks dumped them for cost savings & convenience. Moved t online discounters. 

Edited December 3, 2025 by Munger_Disciple

[villainx]

Maybe a start up will, but folks might not conceptualize that they are paying the brokers because it's insurance company that is paying them?  And for many mom pops insurance brokers are part of doing business, in some cases they are advisors/translators to them.

 

I imagine it's different for larger companies, but I don't know.  I just know for my small re business, insurance policy could decide not to insure or jack up prices seemingly randomly.  And when insurance company was going to cancel policy because some repairs that were required weren't done, the broker said to just hurry up and do and submit the repairs and the insurance company might just reinstated.  Which the insurance broker was right, cause they did.

 

Haha, but I shop the insurance and insurance broker regardless.  Have to lower costs.

 

 

[Munger_Disciple]

1 minute ago, villainx said:

Maybe a start up will, but folks might not conceptualize that they are paying the brokers because it's insurance company that is paying them?  And for many mom pops insurance brokers are part of doing business, in some cases they are advisors/translators to them.

 

I imagine it's different for larger companies, but I don't know.  I just know for my small re business, insurance policy could decide not to insure or jack up prices seemingly randomly.  And when insurance company was going to cancel policy because some repairs that were required weren't done, the broker said to just hurry up and do and submit the repairs and the insurance company might just reinstated.  Which the insurance broker was right, cause they did.

 

Haha, but I shop the insurance and insurance broker regardless.  Have to lower costs.

 

 

 

This space will be interesting to watch for sure. Seems like a low hanging fruit that's ripe for disruption. 

[Libs]

Take anything complicated and people will want help. Real estate, insurance, you name it. Financial advisors are supposedly unnecessary- yet they are thriving.

AI is just going to make it easier for do-it-yourselfers. They were never going to use advisors anyway.

Edited December 3, 2025 by Libs

[Junior R]

if anything AI will give these brokers another toolkit in the toolbox....There has to be a frontend to this app for the user to plug in the information...If it was easy for the others to do this google would have done this long ago with search

[Cod Liver Oil]

I'm inclined to agree with Junior. My friend at Lloyds said the average age of agents is 59 and half of the industry is set to retire in the next 5 years: the brokerages are happy to ease out the expensive paper pushers and replace the hack work with AI so the cost side will benefit. My own experience in non-comodified markets says the intermediary is here to stay. As the world gets more complicated and risky, the intermediate mansplainer becomes an important strategist and soothsayer. RE agents and art dealers play a biblical role in human transactions. Risk of loss is a deep psychological fear; people will over-invest to prevent ruin and sleep well at night. 

Edited December 4, 2025 by Cod Liver Oil

[lnofeisone]

2 hours ago, Munger_Disciple said:

 

Why can't other startups with just a great app compete & destroy the existing brokers who have basically zero IT skills? This is what happened in the stock brokerage industry. The full service guys had shitty online tools, and many still do, so folks dumped them for cost savings & convenience. Moved t online discounters. 

On the lower end (think car insurance, home insurance) sure. On the higher end, where I have $100,000 to $1,000,0000s riding, I am not going to trust AI. We are not there yet.

[longterminvestor]

1 hour ago, Munger_Disciple said:

Can AI eventually kill all or most of these brokers? Seems like a reasonable bet to me, Most of these people add zero value. 

 

Them fighin' words...hahaha.  Brokers don't add value?  Add value to those that buy insurance or take the risk? 

 

Regarding buyers of insurance, there are many scenarios where clients have called 50 insurance companies and can not get insurance, call a broker and options suddenly appear.  Clients inherently dont trust insurance companies either and want a broker to recommend ways to reduce spend/or increase coverage.  Client might be negotiating a contract and needs certain coverages.  Client might be getting a loan and needs certain coverages that the bank requires.  Lots of value on lots of levels. 

 

Regarding insurance companies, where do you think the risk comes from?   Just magically appears?  The brokers serve up the risk and collect the premium for the insurance companies.  Brokers gather all the really annoying documents to "present the risk" so an insurance underwriter can make a decision. Applications, questions about the risk, addresses for properties, limits, construction type, elevations, loss history on the risk.  And lastly, a company underwriter will depend on that data being accurate and holds the broker responsible for accurate information.  Brokers are also responsible for getting the money, brokers are in the collections business big time.  Insurance companies want their money up front and brokers have to get it for them.  

 

You want to do a simple transaction in insurance, that is fine - AI can have those.  But insert a chemical processing facility that just so happens to have a 1200 student lower school across the street with kids or sexual abuse/molestation coverage on 1500 medispa's.  Gonna need a broker for that.  And the world is getting more complex, not less.  Think about the paper work you need for a mortgage today?  Multiply that out and thats similar to what a middle market insurance account looks like.  Some clients sign whatever is asked no problem, other clients want to read every line.  

 

In the future, maybe the insurance companies try to intermediate the way risk/premium gets deal flow.  There will be some.  However, be mindful that clients will want a broker to represent their interest in transaction.  

[tnathan]

23 minutes ago, longterminvestor said:

 

Them fighin' words...hahaha.  Brokers don't add value?  Add value to those that buy insurance or take the risk? 

 

Regarding buyers of insurance, there are many scenarios where clients have called 50 insurance companies and can not get insurance, call a broker and options suddenly appear.  Clients inherently dont trust insurance companies either and want a broker to recommend ways to reduce spend/or increase coverage.  Client might be negotiating a contract and needs certain coverages.  Client might be getting a loan and needs certain coverages that the bank requires.  Lots of value on lots of levels. 

 

Regarding insurance companies, where do you think the risk comes from?   Just magically appears?  The brokers serve up the risk and collect the premium for the insurance companies.  Brokers gather all the really annoying documents to "present the risk" so an insurance underwriter can make a decision. Applications, questions about the risk, addresses for properties, limits, construction type, elevations, loss history on the risk.  And lastly, a company underwriter will depend on that data being accurate and holds the broker responsible for accurate information.  Brokers are also responsible for getting the money, brokers are in the collections business big time.  Insurance companies want their money up front and brokers have to get it for them.  

 

You want to do a simple transaction in insurance, that is fine - AI can have those.  But insert a chemical processing facility that just so happens to have a 1200 student lower school across the street with kids or sexual abuse/molestation coverage on 1500 medispa's.  Gonna need a broker for that.  And the world is getting more complex, not less.  Think about the paper work you need for a mortgage today?  Multiply that out and thats similar to what a middle market insurance account looks like.  Some clients sign whatever is asked no problem, other clients want to read every line.  

 

In the future, maybe the insurance companies try to intermediate the way risk/premium gets deal flow.  There will be some.  However, be mindful that clients will want a broker to represent their interest in transaction.  

+1 ... the more complicated / bespoke the policy the more AI is not the answer. The brokers that are large / handling the largest customers are much more insulated

[dwy000]

5 hours ago, longterminvestor said:

Top level analysis - maybe the best "deal" Baldwin has struck.  

 

CAC LTM 2025 revenue of $300M.  Purchase price of $1B ($438M Cash / $589M Stock).  3.33X Revenue.  

 

Tough to suss out true EBITDA because of Baldwins use of use forward looking proforma adjusted numbers.  

 

Lastly, I am personally surprised CAC couldnt get a higher valuation from someone else and Baldwin was the chosen partner moving forward.  Reality sets in here that valuations have 100% come down.   

CAC Group Partnership.pdf 1.49 MB · 9 downloads

Don't forget the $320m of earnouts and post payments that, if typical for Baldwin, will get paid out in full.  So closer to 4.5x revenues.

[Spekulatius]

Yep, I recommend for anyone who believes brokers get disintermediated easily to shop their homeowner insurance themselves for a small taste. It can be done but you spent countless hours to get a deal or perhaps not.

 

I just have my broker do a runaround because the insurance co I have car insurance  with would not insure a home with 3 tab roofs last year. Now I got confirmation that they changed this for existing customers so that saves me a few bucks.

 

I had another broker set to quote me a package of homeowners , Car and a umbrella and he guaranteed me it would be cheaper than my existing package after looking at my package ( I sent him my docs ) except when it was all said and done, it was not. The list goes on and on.

 

And this is with simples case like homeowners and car insurance with no claims for many years whatsoever. Now throw a more complex case with a business with employees, some prior claims and what not and there are a myriad combinations.

 

Whoever thinks that a few programmers with some AI skills can pulls this off easily has not thought this through.

[Castanza]

The more vanilla the situation the better AI will be. At this point in time I would say both things are likely true, with time being the x component of the equation. AI will almost certainly get better over time and inch its way into many industries (medicine, law, counseling, real estate,  insurance, etc.). The more data and situations it encounters the better it gets. I’m more interested in seeing which companies let the leash out the furthest the soonest. I’m inclined to think that one big screw up in any of these industries caused by AI will have a pretty big negative ripple effects for adoption in complex scenarios by others.
 

However history does show us that over time rules and norms are often broken…

Edited December 4, 2025 by Castanza

[Munger_Disciple]

2 hours ago, Spekulatius said:

Yep, I recommend for anyone who believes brokers get disintermediated easily to shop their homeowner insurance themselves for a small taste. It can be done but you spent countless hours to get a deal or perhaps not.

 

I just have my broker do a runaround because the insurance co I have car insurance  with would not insure a home with 3 tab roofs last year. Now I got confirmation that they changed this for existing customers so that saves me a few bucks.

 

I had another broker set to quote me a package of homeowners , Car and a umbrella and he guaranteed me it would be cheaper than my existing package after looking at my package ( I sent him my docs ) except when it was all said and done, it was not. The list goes on and on.

 

And this is with simples case like homeowners and car insurance with no claims for many years whatsoever. Now throw a more complex case with a business with employees, some prior claims and what not and there are a myriad combinations.

 

Whoever thinks that a few programmers with some AI skills can pulls this off easily has not thought this through.

 

Well I work with MMC broker for all my personal stuff & they are just ok, not great. They make a lot of mistakes so you have to double check every damn thing. They once insured the same home twice & billed me for 2x from the same insurer. 

 

I am almost certain AI will eliminate a lot of these people. As with any tech, the disruption will be at the margins at first , and then perhaps will accelerate as tools get better & better over time. 

[villainx]

7 minutes ago, Munger_Disciple said:

I am almost certain AI will eliminate a lot of these people.

 

AI is going to disrupt for sure, but it'll help the brokers first because lots of folks will get displaced and margins go up.  But it's different from a AI startup company displacing the human led company.  Seems more like insurance broker biz works best with a lot of ai to find the best product and then the human holds hand.

 

 

[longterminvestor]

42 minutes ago, Munger_Disciple said:

 

Well I work with MMC broker for all my personal stuff & they are just ok, not great. They make a lot of mistakes so you have to double check every damn thing. They once insured the same home twice & billed me for 2x from the same insurer. 

 

 

How can you hate on the business model?  Double billed client and broker still doesn't get fired?  What a business!  Win for brokers.

 

sorry for your bad experience but it does prove the point.  

Edited December 4, 2025 by longterminvestor

[Munger_Disciple]

48 minutes ago, longterminvestor said:

 

How can you hate on the business model?  Double billed client and broker still doesn't get fired?  What a business!  Win for brokers.

 

sorry for your bad experience but it does prove the point.  

 

Why do you think the broker won't get fired? Most likely will be prior to next renewal. 

[Munger_Disciple]

1 hour ago, villainx said:

 

AI is going to disrupt for sure, but it'll help the brokers first because lots of folks will get displaced and margins go up.  But it's different from a AI startup company displacing the human led company.  Seems more like insurance broker biz works best with a lot of ai to find the best product and then the human holds hand.

 

 

 

You don't know how the disruption takes place, neither do I. So it's dangerous to opine how exactly it will happen. 

Edited December 4, 2025 by Munger_Disciple