Whiplash in 2025: Insurance, M&A, and Market Madness

We’re nearly two months into 2025. I sound old, but that’s hard to believe. Time is a funny thing—the older you get, the faster it goes. I’m sure Einstein would have something about relativity to say on that.

A lot is happening, and change seems to be happening at breakneck speed. From a destabilized geopolitical landscape (driven largely by Donald Trump) to AI’s exponential improvements week over week, the pace is relentless. The looming threat of tariffs makes it even harder for companies to budget and plan production. If you’re a federal worker, you’re probably frustrated by the latest email asking what you did all week. A friend of a friend, a VA nurse, received that email—it’s remarkable that we’re asking highly skilled medical professionals to justify their work weekly. This kind of destabilizing leadership could have serious consequences for U.S. treasury and bond sales. If it continues, it could even challenge the U.S. dollar’s status as the world’s reserve currency. But I digress.

Insurance, while slightly less exciting, is a microcosm of the broader macroeconomic environment. At its core, an insurance contract is borrowing a balance sheet and transferring risk to someone with more financial security. The market isn’t immune to the hysteria and rapid changes around us. Capital providers in insurance are watching these shifts closely. The hope was that we’d see a softening market, but given the chaos, that idea may have stalled. Uncertainty breeds differing interpretations, and differing interpretations lead to lawsuits. Post-COVID, we've already seen a dizzying wave of litigation, opinions, and voices. And uncertainty is no friend to financial or insurance markets. I predict 2025’s insurance cycle will mirror the press cycle—volatile and fast-moving.

On the M&A front, overall deal volume is down, but big deals continue to dominate the headlines. Just today, as I write this, one of the last large regional players, Woodruff Sawyer, is in talks to be acquired by Gallagher for over $1 billion. That’s unfortunate for the brokerage landscape—WS is employee-owned (not in the ESOP sense, but most shareholders are owners). It’s a similar situation to Hays Group before Brown & Brown acquired them in 2018 for roughly $700 million. The latest brokerage top 100 report has WS at about $260 million in revenue, making them, outside of Lockton, one of the only top 20 firms without private equity backing. Other major deals in the past six months include McGriff and Horton (both acquired by MMA) and Gallagher’s acquisition of Assured Partners in December. It makes me wonder what Gallagher’s debt load will look like after the WS deal. A little over a year ago, Aon bought NFP in a $13 billion+ deal.

I’ve said it before, and I’ll say it again—this trend isn’t good for insurance buyers. The industry is moving toward an airline-like consolidation (hopefully with better outcomes), where fewer regional and truly independent brokerages remain. Many firms are pushed into sales due to a lack of succession planning and the lure of liquidation. Given today’s multiples, it’s not surprising. But this trend benefits real independent brokerages—like Christensen Group, a 100% ESOP with no plans to sell—because consolidation brings disruption, especially for clients.

That’s all for today. Keep tuning in—whether through RiskCellar, my Substack, or my LinkedIn newsletter. Thanks for reading, and try not to get whiplash.

xoxo

Brandon Schuh