Artificial intelligence (AI) and technology investment are expected to become increasingly important drivers of productivity and profitability for insurance brokers, according to Moody’s Ratings, the global credit ratings, research and risk assessment agency.
While the sector is facing a period of slower growth as insurance pricing softens and economic conditions become more challenging, Moody’s believes firms with strong data capabilities and successful technology strategies will be best positioned to improve efficiency, strengthen client relationships and support long-term earnings growth.
Moody’s says brokers that have invested in standardising internal data and integrating information from acquired businesses are in the strongest position to deploy AI across their operations.
The agency expects AI to play a growing role in automating administrative processes, including policy submissions, policy reviews and billing, while also helping firms identify new business opportunities, assess client risk requirements and respond more effectively to changing insurer appetites.
According to Moody’s, the benefits of AI are unlikely to translate immediately into higher profits, as many firms continue to reinvest gains into technology infrastructure, data management and specialist talent. However, the agency expects these investments to contribute to stronger business generation, improved productivity and gradual margin enhancement over time. Moody’s believes brokers that combine scale, high-quality data and innovation will be particularly well placed to benefit.
The agency also highlights the risks associated with increased AI adoption. Moody’s notes that greater reliance on AI can expose firms to cybersecurity threats, data quality concerns, governance shortcomings and model errors.
Failures in these areas could result in operational disruption, remediation costs, professional liability claims and reputational damage. As a result, Moody’s says effective oversight, robust controls and disciplined risk management frameworks will be essential as brokers expand their use of AI.
Despite rapid technological advances, Moody’s does not view AI as a significant threat to the core role of major insurance brokers. While digital insurance platforms and direct distribution models continue to develop, the agency argues that large brokers remain focused on providing advice and solutions to medium-sized and large businesses 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 of technology investment comes against a backdrop of moderating growth across the sector. 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 in 2026. Wholesale and specialty brokers are forecast to achieve mid-single-digit growth, a notable reduction from the double-digit expansion recorded in recent years.
According to Moody’s, insurance brokers are emerging from a period of exceptionally strong growth that was supported by economic expansion and sustained increases in property and casualty insurance rates. The operating environment is now becoming more challenging as overall property insurance pricing declines, although some casualty insurance lines continue to record rate increases.
Moody’s notes that organic growth across the brokerage industry is closely linked to economic conditions and insurance pricing trends. The agency points out that average organic revenue growth among investment-grade brokers has already slowed from high-single-digit levels between 2021 and 2024 to approximately 3% to 4% in recent quarters. It expects growth to remain subdued throughout 2026.
Wholesale and specialty brokers, which have outperformed much of the wider market in recent years, are also experiencing slower momentum. Moody’s says firms operating in excess and surplus insurance markets have benefited from increased demand for specialist coverages and the ability of insurers in those markets to react quickly to changing risk conditions. However, recent declines in property insurance rates have reduced growth prospects, prompting Moody’s to forecast mid-single-digit organic growth for the segment next year.
The agency also points to increasing competition within commercial insurance markets. Data referenced by Moody’s shows that commercial insurance pricing continued to soften through 2025, with rates declining in areas such as commercial property, directors’ and officers’ liability, workers’ compensation and cyber insurance. Moody’s expects pricing pressure to continue during 2026 as insurer capacity remains strong.
Although softer pricing may weigh on 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 investment in operational efficiency. Large diversified brokers are pursuing gradual margin expansion through technology-led productivity improvements, while profitability among smaller firms is expected to vary according to business mix and acquisition activity.
Moody’s also expects credit fundamentals to remain stable. Investment-grade brokers are forecast to maintain median debt-to-EBITDA levels of around 3x, while speculative-grade brokers are expected to remain within a range of 6.5x to 7.5x on a pro forma basis. The agency believes recurring revenue streams and flexible cost structures continue to provide brokers with strong cash flow generation and good control over leverage metrics.
Consolidation remains another important theme across the industry, although Moody’s expects acquisition activity to continue at a more measured pace than in previous years. Large transactions completed over the past two years have significantly expanded the capabilities and market reach of major brokerage groups, particularly in the US middle market. However, many firms are now focusing on integrating existing acquisitions, contributing to a reduction in overall deal volumes.
Moody’s reports that outstanding debt across rated insurance brokers has reached approximately $162 billion as of May 2026, reflecting both acquisition financing and sector growth. The agency nevertheless considers debt maturities to be manageable and expects firms to continue refinancing obligations well before they become due.
Overall, Moody’s maintains a stable outlook for the insurance brokerage sector over the next 12 to 18 months. While growth is expected to slow as insurance pricing normalises and economic conditions soften, the agency believes ongoing investment in technology, artificial intelligence, data analytics and operational efficiency will help support profitability, strengthen competitive positioning and enhance long-term performance across the industry.
