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

[longterminvestor]

Here's a situation where broker can provide value. 

 

Reviewing a deal, premium spend is $335K.  That's worth roughly $40K revenue/commission, that will get some attention around the office.  Crack open 200+ pages of policy and find this endorsement (see below).  Seems understandable to any financial mind - $129M sales X $2.60 Rate = $335,400 premium.  But read the audit provision.  Carrier, this case Lloyds, has agreed to provide a 10% growth factor on sales and waives audit in event sales growth are within 10% of reported exposure at inception of policy.  Meaning if after audit, business has gross revenue of $141.9M or less, audit is waived.  However, if after audit, business did $142M or more, they have to pay at account rate of $2.60 for the delta. On $12.9M sales - that's an invoice for $33,540 premium owed.  

 

A smart intelligent, motivated to sell insurance broker can do a lot with this endorsement depending upon the financial sophistication of the client.  A run-of-mill broker wont even read the policy and just say "I will get a cheaper option for you".  The intelligent broker will show this endorsement to client and say "What did your incumbent broker say when you asked for the 20% growth factor in policy Lloyds is showing you here?  Why was the 10% box checked?".  That will spark a deep conversation about business growth plans, history of business, or maybe never knew that provision was in there, my broker never showed me this endorsement which could lead to "How long have you been with Lloyds cause if its been 5+ years, you may be eligible for the flat/no audit provision here".

 

Even still more creative, broker could break it down to premium savings and say "Mr. CFO, you have this 10% growth factor here - how sure are you on the $129M revenue estimate?"  Answer comes from Mr. CFO "Take that $129M to the bank, its locked in and we can't grow any more than that anyway".  Here's the savings.  "Okay Mr. CFO, may we recommend at renewal you report $118M, which equates to a $29K premium savings, and when audit comes back at $129M, you are within your 10% growth factor and you won't owe any money at audit, take the $29K and bonus that to your staff for a great year."   Sign here if you want me representing your insurable interest in this transaction!  Boom!

 

There's just so many ways to break down accounts, look at things, be creative as a broker and add value.  This is just 1 of 1000's of things that are dependent on another 1000 factors so its exponentially complex.  Client needs, market conditions, class of business, shortages of capacity, over capitalized markets creating more endorsements to mess with premiums, audits, exposure changes, new CFO, new carrier, carrier goes belly up mid term and you gotta find a new one, new bank wants weird language you have to comply with, business got sold new owner, building is old with old roof, claims problems, service problems, list goes on...

 

Unfortunately there are so many bad experiences, the policies are boring to read and complicated to understand - folks don't know how much optionality is out there - they don't know what is possible because no one reads this stuff.  Most brokers don't really care about getting the best execution for client - they just want to make their $40K commish - and that's understandable.  

 

I guess to further your point @Munger_Disciple, there is truth to what you say.  There are many brokers who do not add value and are order takers, but that does not mean all brokers do not/can not provide value - a good broker can provide a ton of value.  Maybe AI helps brokers provide more and more value over time.  

 

ENDORSEMENT:

 

Edited December 4, 2025 by longterminvestor

[Munger_Disciple]

24 minutes ago, longterminvestor said:

I guess to further your point @Munger_Disciple, there is truth to what you say.  There are many brokers who do not add value and are order takers, but that does not mean all brokers do not/can not provide value - a good broker can provide a ton of value.  Maybe AI helps brokers provide more and more value over time.  

 

 

I agree with you that there are good brokers out there who deserve their fees. It's just that there are many who aren't, and if AI helps the situation for good brokers to do more business while eliminating bad ones, I am all for that. 

[dealraker]

https://www.sicafletcher.com/_files/ugd/183b46_e06832d7e3404b679521425ed3f48574.pdf

AJG_Case_Study.pdf

[dealraker]

From Sika Fletcher:

 

Overview

The insurance brokerage industry looks very different from how it looked in 2000 when half of the 10 largest brokers in the U.S. were publicly traded and the private equity world didn’t know insurance brokers even existed. A consistent and sustained trend in this fragmented industry for decades has certainly been consolidation, which has led to the creation of some of the world’s largest and most diverse insurance brokers. From 2000–2010, highly acquisitive public brokers such as Arthur J. Gallagher (NYSE: AJG), Brown & Brown (NYSE: BRO) and Aon PLC (NYSE: AON) accounted for the majority of broker acquisitions aided by their well-oiled M&A machinery and ready access to capital. As these firms were amassing their global brokerage empires, private equity sponsors entered the brokerage scene around 2007, and by 2014, essentially dominated the M&A landscape having completed thousands of transactions worth billions in the aggregate. Sica | Fletcher’s 2024 Index shows that private-equity–backed brokers accounted for 88% of all announced deals, with public brokers and other buyer types making up the remainder.

In December 2024, publicly-traded AJG announced its acquisition of private-equity–backed AssuredPartners for $13.45 billion – the largest acquisition to date of a PE-backed broker by a publicly-traded broker and barely surpassing Aon’s 2024 acquisition of NFP, valued at $13.4 billion. In light of the recent trend of these mega-unions where PE-backed brokers are being consumed by their publicly-traded counterparts, in March of this year, Sica | Fletcher published an article about the AJG/Assured transaction and asked a fundamental question: Is this the beginning of the empire striking back where strategics begin to reclaim their historical M&A dominance and market share from PE-backed investors?

So far, the answer has been a resounding yes. On August 1, barely eight months after AJG announced its intent to acquire Assured, Brown & Brown, the seventh-largest U.S. insurance broker, announced that it would acquire the 14th-largest, Risk Strategies (RSC) underscoring our thesis that the publicly traded brokers will continue to supplant private equity firms as the dominant force in this industry. At the time of the announcement, RSC reported revenue of $1.7 billion and pro forma EBITDA of $600 million which produced a $9.8 billion valuation.

It was widely reported that Risk Strategies had been actively exploring strategic options for much of 2024 and many industry insiders speculated that RSC would recapitalize with a new PE investor. At one point, it was reported that RSC was close to a deal with London-based Howden, which sought a U.S. retail presence and would have been a compelling strategic fit. The transaction, however, surprisingly collapsed as a result of several purported due diligence issues that could not be adequately resolved.

Many, including some RSC insiders, were equally surprised when just a few months later Brown stepped in and acquired RSC. On the Sica | Fletcher Leaders & Legends podcast, Mike Christian, Chairman & Founder of RSC, when responding to a question about selling RSC to a publicly traded broker, he stated clearly, “That would’ve been the last thing I would’ve thought about.”

Despite the initial shock, we believe RSC shareholders will come to view this deal favorably outcome, and since approximately 38% of RSC’s 200+ completed transactions in the past five years were Sica | Fletcher clients, we can express this opinion with some confidence.

Given RSC’s scale, specialty focus and our deep knowledge of the firm, we believe many shareholders expected an 18.0x multiple and preferred a recap with another PE sponsor that would have enabled it to stay out of the publicly traded realm. But in today’s interest-rate environment, math makes that difficult. Why? PE limited partners (LPs) typically expect at least 15.0% returns before allocating capital to any fund. Given industry average fund management fees (2.0% plus a 20.0% carry), PE funds generally need 20.0%+ gross returns to satisfy LP expectations. Over the past decade, however, PE firms relied on multiple expansion and arbitrage, cheap and abundant leverage and heavy M&A activity in order to deliver those returns. That recipe produced spectacular and unprecedented results but will be harder to consistently replicate going forward.

Would RSC Have Been Better Off Forgoing Optionality?

Given these hurdles, we posed another fundamental question: Would RSC have been better off forgoing optionality and recapitalizing with another private equity firm, rinsing and repeating the same M&A program and then reselling in another five years? We don’t believe so. The chart below compares expected returns for a hypothetical PE investor acquiring RSC under two valuation scenarios of 16.3x and 18.0x vs. Brown’s actual deal at 16.3x and fundamentally takes RSC out of the acquisition arena - a key element of its growth and expansion over the past decade.

In the 18.0x scenario, a PE investor should expect an approximately 9.6% levered return and at 16.3x, an approximately 10.1% return. In our Expected Return analysis, we did not assume any add-on acquisitions, which would raise returns for any acquirer. The issue is RSC’s size: at $600 million of EBITDA, generating meaningful uplift in returns purely through add-ons is more difficult than it would be for, say, a $200–$300 million EBITDA platform, i.e., moving the needle via acquisitions simply gets more challenging the larger the buyer becomes. We would argue a smaller RSC might well have attracted a PE investor at 16.0x.

In the 16.3x scenario, a 10.1% expected return on the RSC deal for a private equity investor would have meant continued reliance on significant M&A activity to boost returns. After fees, LPs could be left with returns as low as 5% assuming RSC isn’t able to generate material future add-on activity.

WHY BROWN'S RETURNS LOOK MORE ATTRACTIVE

Brown’s expected levered return is approximately 12.9%, which assumes no incremental returns from M&A add-ons. Brown can achieve this more attractive return largely through transaction synergies (estimated at $150 million of EBITDA) and favorable borrowing terms to partially fund the transaction (roughly $4.0 billion at about 5.3%). Most importantly, Brown does not face PE’s fee-driven return hurdles.

Finally, expected returns aside, RSC shareholders should recognize that liquidity – i.e., bankable proceeds today – matters. Many announced deals tout headline multiples and valuations but offer limited near-term liquidity for the equity portion of consideration. In Brown’s acquisition, RSC shareholders received an 86%/14% cash/stock mix. Although the Brown stock is restricted, or “locked up”, for 2–5 years depending on certain scenarios, at least there is a clear and enforceable liquidity path for the equity portion of consideration.

To be fair, equity provided in PE deals also provides eventual liquidity, but the timing of recapitalizations is uncertain and there are usually restrictions on how much can be monetized during a recap.

From a timing perspective, things could not have been worse. To take a company private requires the buyer to pay a significant premium over the current market price of the stock. So not only did Goldman and Apax have to pay a premium, but they paid a premium at the top of the 2007 stock market, just before the market fell by 53% in the largest financial crisis to take place since the Great Depression.

So how did those deals turn out for investors? Despite these headwinds, the returns proved impressive. USI reportedly generated 2.5x returns over five years and HUB generated 3.5x returns over five years. For lenders, the test case of lending to insurance brokers with no real assets in a challenging environment proved lucrative. These two deals would set the stage for what was to come next.

Expected Returns - Brown & Brown/RSC

Our Expected Return model estimates “ballpark” returns from a general investor perspective rather than forecasting returns for a specific investor. Institutional investors typically use IRR, ROIC, CAPM and other models, which are investor specific. Sica | Fletcher built its model on the framework of AQR’s expected-return model for private assets1, swapping inputs to enable transaction-level views in our industry.

First and foremost, we note that each input is variable, and changes can materially affect the final output. We begin the unlevered Expected Return calculation with the inverse of the EBITDA multiple to derive an EBITDA Yield (EY). We then reduce that yield by 25% as a proxy for Free Cash Flow (FCF) Yield, which accounts for CAPEX, taxes and other outflows. We believe this 25% assumption is a conservative baseline as brokers generally need little in terms of capital expenditures. We then add expected growth (G) to the FCF Yield to arrive at our Expected Return (ER), apply leverage and its corresponding Cost of Debt (CD) based on the Secured Overnight Financing Rate (SOFR) plus a market standard spread, and finally, add expected Multiple Expansion (ME), which we assume to be zero in our analysis, to compute our Expected Return (Levered), or ERL.

Conclusion

Our conclusion is that Brown’s acquisition of RSC at 16.3x was a shareholder win with an Expected Return (Levered) of 12.9% stemming, in part, from the impact of material transaction-related synergies and an overall lower cost of debt.

As other PE-backed brokers approach the scale of RSC and AssuredPartners in the coming years, their future exit options will increasingly – and necessarily – include the publicly-traded “empires” that can realize material synergies and deliver compelling economics to shareholders without private equity’s liquidity and return constraints. It’s taken nearly two decades, but the empire has indeed struck back and the next wave of PE-backed broker ownership changes, whether involving an IPO, a recapitalization with other private equity firm or a sale to one of the handful of publicly traded firms, will continue to dramatically shape this ever-evolving industry. 

Want to hear Managing Partner Mike Fletcher's take on this deal? Check out this episode of our Navigating the Deal podcast.

Edited December 4, 2025 by dealraker

[Spekulatius]

On AJG- I found this nugget regarding the AP acquisition from their recent special call. Below is what Douglas Howell said. If correct, they acquired this business for 10x EBITDA Post synergies :

 

Quote

A few things to highlight. First, AssuredPartners annualized revenue is more than $3 billion. That's a nice increase from the $2.9 billion and reflects about 5% organic growth for fourth quarter '24 and the first half of '25, and just a small amount of M&A. Second, when you look at the synergies. We expect to achieve annual run rate synergies of $160 million by late '26 and approximately $260 million to $280 million of annual run rate synergies by early '28. Third, the effective multiple paid for AP is now a little over 10x EBITDAC. That's about a turn better from when we announced the acquisition. That's due to the growth in EBITDA over the past few quarters, combined with a higher level of expected synergies. Fourth, we now expect EPS accretion relative to Gallagher's trailing 12-month adjusted non-GAAP EPS, excluding the impact of AP financing to about -- to be between 12% and 14%.

 

[Hektor]

1 hour ago, dealraker said:

https://www.sicafletcher.com/_files/ugd/183b46_e06832d7e3404b679521425ed3f48574.pdf

AJG_Case_Study.pdf 3.4 MB · 5 downloads

Thank you @dealraker

[dealraker]

Podcast:

 

https://www.sicafletcher.com/gallagher-assured-deal-podcast

[dwy000]

@longterminvestor do you do cyber insurance at all?  Theres an interesting discussion on the Beazley thread regarding a flood of new entrants, potentially poor underwriting and pricing taking a huge hit.  Its a relatively young and untested market segment so i dont know if its a ticking time bomb or a growing opportunity. Wondering if youre seeing that (including other risks, not just cyber given the softening of pricing across all markets).  

[Libs]

11 hours ago, longterminvestor said:

Here's a situation where broker can provide value. 

 

Reviewing a deal, premium spend is $335K.  That's worth roughly $40K revenue/commission, that will get some attention around the office.  Crack open 200+ pages of policy and find this endorsement (see below).  Seems understandable to any financial mind - $129M sales X $2.60 Rate = $335,400 premium.  But read the audit provision.  Carrier, this case Lloyds, has agreed to provide a 10% growth factor on sales and waives audit in event sales growth are within 10% of reported exposure at inception of policy.  Meaning if after audit, business has gross revenue of $141.9M or less, audit is waived.  However, if after audit, business did $142M or more, they have to pay at account rate of $2.60 for the delta. On $12.9M sales - that's an invoice for $33,540 premium owed.  

 

A smart intelligent, motivated to sell insurance broker can do a lot with this endorsement depending upon the financial sophistication of the client.  A run-of-mill broker wont even read the policy and just say "I will get a cheaper option for you".  The intelligent broker will show this endorsement to client and say "What did your incumbent broker say when you asked for the 20% growth factor in policy Lloyds is showing you here?  Why was the 10% box checked?".  That will spark a deep conversation about business growth plans, history of business, or maybe never knew that provision was in there, my broker never showed me this endorsement which could lead to "How long have you been with Lloyds cause if its been 5+ years, you may be eligible for the flat/no audit provision here".

 

Even still more creative, broker could break it down to premium savings and say "Mr. CFO, you have this 10% growth factor here - how sure are you on the $129M revenue estimate?"  Answer comes from Mr. CFO "Take that $129M to the bank, its locked in and we can't grow any more than that anyway".  Here's the savings.  "Okay Mr. CFO, may we recommend at renewal you report $118M, which equates to a $29K premium savings, and when audit comes back at $129M, you are within your 10% growth factor and you won't owe any money at audit, take the $29K and bonus that to your staff for a great year."   Sign here if you want me representing your insurable interest in this transaction!  Boom!

 

There's just so many ways to break down accounts, look at things, be creative as a broker and add value.  This is just 1 of 1000's of things that are dependent on another 1000 factors so its exponentially complex.  Client needs, market conditions, class of business, shortages of capacity, over capitalized markets creating more endorsements to mess with premiums, audits, exposure changes, new CFO, new carrier, carrier goes belly up mid term and you gotta find a new one, new bank wants weird language you have to comply with, business got sold new owner, building is old with old roof, claims problems, service problems, list goes on...

 

Unfortunately there are so many bad experiences, the policies are boring to read and complicated to understand - folks don't know how much optionality is out there - they don't know what is possible because no one reads this stuff.  Most brokers don't really care about getting the best execution for client - they just want to make their $40K commish - and that's understandable.  

 

I guess to further your point @Munger_Disciple, there is truth to what you say.  There are many brokers who do not add value and are order takers, but that does not mean all brokers do not/can not provide value - a good broker can provide a ton of value.  Maybe AI helps brokers provide more and more value over time.  

 

ENDORSEMENT:

 

 

Great post. I was an underwriter / manager at Chubb from 1985-1999. The great brokers took the time to sort through these issues, solve problems, and build great books of business. The others just lazily hammered at the underwriters (such as me) to cut, cut, cut premiums. It's one of the reasons I left the business- after a while I started to feel like just an order taker. The market was soft for 90% of my tenure in this business, so we never had the leverage.

 

One funny anecdote. My first year was a really hard market. 1985. We were jacking up premiums left and right; and turning down submissions (applications) we would be whoring ourselves for in just two years (little did I know!). One day my boss, who had a good sense of humor, drew up a checklist, a handy shortcut, for reasons to decline a submission. These would only go out to brokers with a sense of humor. One of the boxes said, as the reason to decline: "Client would become insolvent if they had to pay the (jacked up) premium."

 

I had a lot of fun with some of the brokers. One of them sent me a bill for the time he spent digging into some questions I had about a submission. It was titled 'bill for the generation of superfluous underwriting information."

 

Also during these times of mushrooming premiums, the brokers were making a lot of money, but they were delivering some very hard news to clients in terms of premiums. One of them told me he never drove his Mercedes to client meetings, only his Honda Civic. He didn't want to 'rub it in'.

 

In retrospect I wonder if I should have switched to the broker side. I thought about it long and hard. 

 

Brilliant stuff, Long term.  Thanks so much.

 

Edit: I realize in retrospect I ignored the terrific fundamentals of the brokers for 25 years, because of my lukewarm ( at best) memories of those 15 years. A terrible mental error.

 

 

 

Edited December 4, 2025 by Libs

[lnofeisone]

5 hours ago, dwy000 said:

@longterminvestor do you do cyber insurance at all?  Theres an interesting discussion on the Beazley thread regarding a flood of new entrants, potentially poor underwriting and pricing taking a huge hit.  Its a relatively young and untested market segment so i dont know if its a ticking time bomb or a growing opportunity. Wondering if youre seeing that (including other risks, not just cyber given the softening of pricing across all markets).  

I've had a client recently who asked for Cyber insurance and was upfront that "specialist insurer" isn't something they are willing to stomach.  

[thowed]

Did I miss some bad insurance news today?  Everything seems to be down, when everything else is up? Thanks.

[benchmark]

2 hours ago, thowed said:

Did I miss some bad insurance news today?  Everything seems to be down, when everything else is up? Thanks.

Wells downgraded AJG today. AJG seems to be on a streak of downgrades

[coffeecaninvestor]

16 minutes ago, benchmark said:

Wells downgraded AJG today. AJG seems to be on a streak of downgrades

I think the one thing I learned this year is watch out when the market turns on high multiple stocks. AJG trades a premium multiples so hopefully the down grades keep coming! It's tough I really want to buy, but am holding off hoping it drops further. 

[dcollon]

Wells didn't downgrade AJG today.  See below

 

DJ Arthur J Gallagher & Co Is Maintained at Overweight by Wells Fargo

DJ Arthur J Gallagher & Co Price Target Cut to $344.00/Share From $362.00 by Wells Fargo

 

Wells thinks there is 40%+ upside 

[dealraker]

Interesting posts here on AJG!  Facts or fiction?  LOL.

 

My facts, which may differ from your facts.  AJG was not downgraded by Wells.  AJG sells at a significant discount to the market and an average multiple for the brokers.

 

Lastly, with nearly 15 years of broker coverage not once ever has Wells had a 40% upside in a broker price as they do for AJG. 

 

 

 

Edited December 5, 2025 by dealraker

[benchmark]

8 minutes ago, dealraker said:

Interesting posts here on AJG!  Facts or fiction?  LOL.

 

My facts, which may differ from your facts.  AJG was not downgraded.  AJG sells at a significant discount to the market and an average multiple for the brokers.

 

 

Fair enough, I used the word 'downgrade' a bit too loose. Here are the recent rating changes or price target changes to be strict, none of them are positive changes -- not that I trust these changes.

 

Date	Firm	Prior Rating	Latest Rating	Action	New Price Target	Prior Price Target
Dec 5, 2025	Wells Fargo	Overweight	Overweight	Maintains Rating; Lowers PT	$344.00	$362.00
Dec 5, 2025	Wolfe Research	Outperform	Outperform	Maintains Rating; Lowers PT	$285.00	$291.00
Nov 20, 2025	Barclays	Equal-Weight	Underweight	Downgrade	$250.00	$328.00
Nov 20, 2025	Wolfe Research	N/A	Outperform	Initiated Coverage	$291.00	N/A
Nov 3, 2025	Citigroup	Neutral	Neutral	Maintains Rating; Lowers PT	$277.00	$330.00
Nov 1, 2025	Wall Street Zen	Hold	Sell	Downgrade	N/A	N/A
Oct 31, 2025	Evercore ISI Group	Outperform	Outperform	Maintains Rating; Lowers PT	$353.00	$370.00
Oct 31, 2025	Goldman Sachs	Buy	Buy	Maintains Rating; Lowers PT	$315.00	$361.00
Oct 31, 2025	Keefe, Bruyette & Woods	Market Perform	Market Perform	Maintains Rating; Lowers PT	$275.00	$315.00
Oct 31, 2025	Piper Sandler	Overweight	Overweight	Maintains Rating; Lowers PT	$295.00	$340.00

[dealraker]

4 hours ago, benchmark said:

Fair enough, I used the word 'downgrade' a bit too loose. Here are the recent rating changes or price target changes to be strict, none of them are positive changes -- not that I trust these changes.

 

Date	Firm	Prior Rating	Latest Rating	Action	New Price Target	Prior Price Target
Dec 5, 2025	Wells Fargo	Overweight	Overweight	Maintains Rating; Lowers PT	$344.00	$362.00
Dec 5, 2025	Wolfe Research	Outperform	Outperform	Maintains Rating; Lowers PT	$285.00	$291.00
Nov 20, 2025	Barclays	Equal-Weight	Underweight	Downgrade	$250.00	$328.00
Nov 20, 2025	Wolfe Research	N/A	Outperform	Initiated Coverage	$291.00	N/A
Nov 3, 2025	Citigroup	Neutral	Neutral	Maintains Rating; Lowers PT	$277.00	$330.00
Nov 1, 2025	Wall Street Zen	Hold	Sell	Downgrade	N/A	N/A
Oct 31, 2025	Evercore ISI Group	Outperform	Outperform	Maintains Rating; Lowers PT	$353.00	$370.00
Oct 31, 2025	Goldman Sachs	Buy	Buy	Maintains Rating; Lowers PT	$315.00	$361.00
Oct 31, 2025	Keefe, Bruyette & Woods	Market Perform	Market Perform	Maintains Rating; Lowers PT	$275.00	$315.00
Oct 31, 2025	Piper Sandler	Overweight	Overweight	Maintains Rating; Lowers PT	$295.00	$340.00

The only possible way to get a decent entry price for AJG or most any stock is the above scenario.  AJG is an extremely "untimely" stock of a historically beast of a business.

 

The brokers had a lengthy battle with the NY Attorney General Eliot Spitzer (of Heidi Fleiss notoriety) as to contingency commissions in the early 2000's and in 2015 AJG plummeted to 15 times next years earnings.  Relative to the market today is the cheapest the brokers have been since those two episodes.

 

Are they still great businesses?  Will they prevail to outperform over the long term?  

 

 

Edited December 6, 2025 by dealraker

[thowed]

Many thanks for all of this - this forum is so wonderful*

 

 

* excluding politics!

Edited December 5, 2025 by thowed

[Spekulatius]

Well, I continue to nibble on AJG.

 

I think what might have spooked the market is WRB’s family trust selling shares to Mitsui Sumitimo (dumb money?)

https://ir.berkley.com/news/news-details/2025/W--R--Berkley-Corporation-Confirms-Mitsui-Sumitomo-Insurance-Co--Intends-to-Purchase-15-of-the-Companys-Shares-in-Open-Market-or-Private-Transactions-From-Third-Parties/default.aspx

 

I think the take is that smart money (WRB family trust) is selling dumb money (Japanese investors). Not bullish for insurance stocks overall. While not cheap, WRB does not look overvalued to me either.

[buylowersellhigh]

9 minutes ago, Spekulatius said:

Well, I continue to nibble on AJG.

 

I think what might have spooked the market is WRB’s family trust selling shares to Mitsui Sumitimo (dumb money?)

https://ir.berkley.com/news/news-details/2025/W--R--Berkley-Corporation-Confirms-Mitsui-Sumitomo-Insurance-Co--Intends-to-Purchase-15-of-the-Companys-Shares-in-Open-Market-or-Private-Transactions-From-Third-Parties/default.aspx

 

I think the take is that smart money (WRB family trust) is selling dumb money (Japanese investors). Not bullish for insurance stocks overall. While not cheap, WRB does not look overvalued to me either.

How do you view AJG vs BRO? I think you own both.  Just a percent allocation decision or more company specific?

[Spekulatius]

44 minutes ago, buylowersellhigh said:

How do you view AJG vs BRO? I think you own both.  Just a percent allocation decision or more company specific?

Yes, I own BRO, AJG and AON. BRO and AJG are very similar, AON is more focused on larger clients. I think all 3 are buys here. My largest position is BRO so now I am adding to AJG as it is on sale here. I may do some “wash” sales flipping high cost BRO shares into AJG.

Edited December 6, 2025 by Spekulatius

[Xerxes]

https://podcasts.apple.com/ca/podcast/the-gemini-report-investment-deep-dives/id1830518221
 

[WayWardCloud]

This podcast is just 100% AI right? Any particular nuggets of information you liked?

[buylowersellhigh]

On 11/3/2025 at 11:54 AM, dealraker said:

Interestingly as to all brokers but in this case particularly AJG, and while I do not use Wells as my allocating tool (I am well over 50% insurance brokers for decades) of brokers their research has been dead right for 15 plus years...

 

They have what is by far the largest upside ever near term in their expectations of AJG's stock performance, over 50% from today's quote.   Just relaying what I read.  I'd don't think I've ever seen them with a figure over 30% and that's been 1 or 2 times in the last 15 years.

 

I think there is widespread fear of insurance rates of all types and sectors collapsing.   AJG management does not see that coming.  

What is the rationale for Well's 50% upside on AJG?  Are you able to share report?

[LC]

I think you need to take analyst reports with a grain of salt. I don't know who/which team builds the wells reports here, and I do know @dealraker has spoken "highly" of them in the past (in quotes as I don't want to put words in his mouth)  - but on the other side of the spectrum, I have seen analyst reports as essentially trend followers (see Aecon). Stock is going up? Toss a 30% premium price target and regurgitate the bull case. Stock dropping? Probably will fall another 25% and again let's regurgitate the bear case. 

 

IMO it's highly dependent on the individual analyst but even then I would advise caution and spending the hours to do your own homework.