Global credit ratings, research and risk assessment agency Moody’s Ratings said investments in artificial intelligence (AI) and technology are expected to become increasingly important drivers of productivity and profitability for insurance brokers.
Although the industry is facing a period of slower growth as insurance pricing softens and economic conditions become more challenging, Moody’s believes companies with strong data capabilities and successful technology strategies will be best positioned to drive efficiencies, strengthen customer relationships and support long-term profitable growth.
Brokers that invest in internal data standardization and integrating information from acquired businesses are in the best position to deploy artificial intelligence in their operations, Moody’s said.
The agency expects AI to play an increasing role in automating administrative processes, including policy submission, policy review and billing, while helping companies identify new business opportunities, assess customer risk requirements and respond more effectively to the changing needs of insurers.
Moody’s said the benefits of AI are unlikely to translate immediately into higher profits, as many companies continue to reinvest earnings in technology infrastructure, data management and specialized talent. However, the agency expects these investments to help strengthen business development, increase productivity and gradually improve margins over time. Moody’s believes brokers that combine scale, high-quality data and innovation will be particularly well-positioned to benefit.
The agency also highlighted the risks associated with increased adoption of artificial intelligence. Moody’s noted that greater reliance on artificial intelligence could expose companies to cybersecurity threats, data quality issues, governance shortcomings and model errors.
Failures in these areas can result in operational disruption, remediation costs, professional liability claims and reputational damage. As a result, Moody’s said that as brokers expand their use of artificial intelligence, effective supervision, strong controls and rigorous risk management frameworks will be critical.
Despite rapid technological advances, Moody’s does not believe AI poses a significant threat to the core role of major insurance brokers. Despite the continued growth of digital insurance platforms and direct distribution models, the agency believes that large brokers remain focused on providing advice and solutions to large and medium-sized enterprises with complex insurance and employee benefits needs. Moody’s believes these advisory services are difficult to automate and will continue to support the relevance of established brokerage firms.
The positive long-term potential for technology investments comes against a backdrop of slower growth across the industry. Moody’s expects organic revenue growth for investment-grade brokers and speculative-grade retail brokers to slow to the low- to mid-single-digit range through 2026. Wholesale and specialty brokers are expected to post mid-single-digit growth, a significant decrease from the double-digit growth seen in recent years.
Moody’s said insurance brokers are experiencing a period of exceptionally strong growth, supported by an expanding economy and continued increases in property and casualty insurance rates. While some casualty lines continue to record rate increases, the operating environment has become more challenging as overall property insurance pricing has declined.
Moody’s notes that organic growth across the brokerage industry is closely tied to economic conditions and insurance pricing trends. The agency noted that average organic revenue growth for investment-grade brokers has slowed from high single-digit levels between 2021 and 2024 to about 3% to 4% in recent quarters. Growth is expected to remain subdued throughout 2026.
Growth momentum for wholesale and specialty brokers, which have outperformed the market in recent years, is also slowing. Moody’s said companies operating in excess and surplus insurance markets benefit from increased demand for specialty insurance and the ability of insurers in these markets to respond quickly to changing risk profiles. However, recent declines in property insurance rates have reduced growth prospects, prompting Moody’s to forecast mid-single-digit organic growth in the segment next year.
The agency also noted increasing competition within the commercial insurance market. Moody’s cited data showing continued weakness in commercial insurance pricing through 2025, with rates declining in areas such as commercial real estate, directors and officers liability, workers’ compensation and cyber insurance. Moody’s expects pricing pressure to continue in 2026 as insurers’ underwriting capabilities remain strong.
While weak pricing could impact revenue growth, Moody’s believes the sector’s profitability should remain resilient. The agency expects EBITDA margins to remain broadly stable, supported by disciplined expense management and continued investments in operating efficiencies. Large diversified brokers are looking to gradually expand margins through technology-led productivity improvements, while profitability for smaller firms is expected to vary based on business mix and acquisition activity.
Moody’s also expects credit fundamentals to remain stable. The median debt-to-EBITDA level for investment-grade brokers is expected to remain around 3x, while speculative-grade brokers are expected to maintain a range of 6.5x to 7.5x. The agency believes that recurring revenue streams and a flexible cost structure continue to provide the broker with strong cash flow generation and good control over leverage metrics.
While Moody’s expects acquisition activity to be more cautious than in previous years, consolidation remains another important theme across the industry. The large transactions completed over the past two years have significantly expanded the capabilities and market coverage of the major brokerage groups, particularly in the U.S. middle market. However, many companies are now focused on integrating existing acquisitions, resulting in lower overall deal volume.
Moody’s reported that outstanding debt of rated insurance brokers had reached approximately $162 billion as of May 2026, reflecting acquisition financing and industry growth. Nonetheless, the agency believes debt maturities are manageable and expects companies to continue meeting their refinancing obligations before maturity.
Overall, Moody’s remains stable on the outlook for the insurance brokerage industry over the next 12 to 18 months. While growth is expected to slow as insurance pricing normalizes and economic conditions soften, the agency believes continued investments in technology, artificial intelligence, data analytics and operational efficiencies will help support profitability, strengthen competitive position and improve long-term performance across the industry.
