4 Insurance Brokerage Stocks to Watch Amid Increased Digitalization

Industry Overview - The Zacks Insurance Brokerage industry is expected to benefit from better pricing, prudent underwriting, rising demand for insurance products, and global expansion, driving revenues [1] - The global insurance brokerage market size is currently $328.47 billion in 2025 and is anticipated to reach $480.66 billion by 2030, witnessing a 9.47% CAGR during this period [3] - Increased digitization is expected to improve operational efficiencies and scale within the industry [2] Trends Impacting the Industry - Increased demand for insurance products is driving revenues, with industry players expanding globally and improving pricing and underwriting standards [4] - The aging population is increasing demand for retirement benefit products, while millennials and baby boomers are boosting demand for various insurance types [5] - The industry is witnessing fast-paced consolidation, driven by mergers and acquisitions, with private equity interest and competition being key factors [6] Technological Advancements - Insurance brokers are adopting digital tools for policy management and claims processing, enhancing customer interactions [7] - The integration of technologies like AI, machine learning, and blockchain is expected to improve operational efficiency and risk assessment [8] Company Performance - Brown & Brown (BRO) has a market capitalization of $31.45 billion, with earnings growth of 21.5% over the past five years and expected long-term growth of 10.6% [20][21] - Marsh & McLennan (MMC) has a market capitalization of $100.02 billion, with earnings growth of 13.4% over the past five years and expected long-term growth of 8.3% [24][25] - Arthur J. Gallagher (AJG) has a market capitalization of $76.68 billion, with earnings growth of 20.4% over the past five years and expected long-term growth of 8.8% [29][31] - Willis Towers Watson (WTW) has a market capitalization of $32.40 billion, with earnings growth of 9.4% over the past five years and expected long-term growth of 7.5% [34][35] Market Performance - The Insurance Brokerage industry has underperformed its sector and the S&P 500, with a loss of 17.6% over the past year compared to the Finance sector's growth of 18.8% and the S&P 500's appreciation of 19.9% [13] - The industry's Zacks Industry Rank is 160, placing it in the bottom 35% of over 245 Zacks industries, reflecting a negative earnings outlook [10][11]