AI is beginning to change brokerage operations, with Acrisure’s planned workforce reduction making the cost implications concrete. The company said in May it expects to cut about 2,250 jobs, or roughly 11% of its workforce, by next year because AI is reducing the need for manual work. Its earlier announced reduction affected about 400 employees. CEO Greg Williams said some client-facing tasks that used to take days or weeks can now be completed in minutes.
That scale of AI-linked cuts remains unusual in brokerage. The broader business case is less about replacing brokers outright and more about improving productivity as pricing tailwinds fade. Brokers are applying AI to administrative work, data analysis, claims support and risk management. The immediate commercial question is whether those efficiencies can free staff to serve clients and win new accounts while maintaining growth.
Efficiency meets a softer pricing cycle
Brokerage growth is entering a more demanding phase. Property insurance prices have fallen sharply after several years of steep increases, while casualty rates have held firmer amid larger liability settlements and court verdicts. “Outside North American casualty, rates continue to decline across nearly all markets and lines,” said Carl Hess, CEO of Willis Towers Watson.
Some property markets have seen especially pronounced declines. Florida coastal property pricing has returned to levels last seen nearly a decade ago, according to J. Powell Brown, president and CEO of Brown & Brown Inc. Casualty pricing, he said, continues to rise.
When premiums soften, brokers have less help from rate increases in producing organic growth. New business and rising client exposures matter more. “Exposure growth is by far the most important factor,” said C. Gregory Peters, managing director of equity research at Raymond James & Associates.
Economic conditions still shape client demand, and tariff concerns and geopolitical tensions remain sources of uncertainty. Analysts generally describe the current environment as stable, though less favorable than the recent peak. “It’s hard to call it bad; it’s just not as good as it was last year or the year before,” said J. Paul Newsome Jr., managing director at Piper Sandler & Co.
Some clients continue to expand. “They’re adding trucks, buildings, and new operations,” said J. Patrick Gallagher Jr., chairman and CEO of Arthur J. Gallagher & Co. For brokers, that kind of exposure growth can help offset declining prices, but it puts greater weight on attracting and retaining customers.
Investors are looking more closely at growth quality
Organic growth alone says less about competitive strength than it did during the hard market, when rising prices could lift revenue across the sector. John Wepler, chairman and CEO of MarshBerry, said investors now pay closer attention to where growth comes from, including new accounts, geographic expansion, specialized expertise or favorable market conditions.
Sales velocity is another point of focus. The measure compares new business generated with a broker’s existing revenue base. Wepler said firms with stronger sales cultures and producer-development programs could be better placed if pricing and client exposures weaken. In that environment, the ability to develop producers and convert prospects into customers may distinguish brokers more clearly than market-wide premium increases.
Talent competition adds to the pressure. Howden Group’s rapid expansion in the U.S. retail brokerage market, including the hiring of hundreds of producers and executives from rivals, disrupted the market and contributed to more litigation related to employee poaching. Analysts say the competition may also push compensation costs higher as firms try to retain experienced producers or recruit them from competitors.
AI advantages may favor brokers with scale and data
For now, most brokerage executives and analysts see AI as a tool that can strengthen the business. The work of insurance placement still involves substantial manual data entry, Hess said. “AI can clearly make the insurance value chain more efficient. There is still a lot of manual data entry and repeated data entry.”
Large firms could use those efficiency gains to redirect resources toward sales, consulting and risk management, Wepler said. Scale may also help them invest in technology and make use of proprietary information gathered through years of work with policyholders and insurers. Analysts say that data could improve risk analysis, surface emerging exposures and support more tailored client advice.
Those advantages could create a widening gap between large brokers and smaller firms that have fewer resources to build or adopt AI tools. Yet concerns that automation will remove commercial brokers from the insurance process appear overstated to most analysts. Many commercial buyers face risks that cross coverage lines and jurisdictions, and need help navigating complex insurance needs.
“If I run a restaurant and I have a fire, is AI or a chatbot going to settle my claim for me? Probably not,” said Brian Meredith, a New York-based managing director at UBS. Elyse Greenspan, managing director of insurance equity research at Wells Fargo Securities, said personal lines and small commercial accounts are likely to face greater automation exposure. Those segments represent only a small share of revenue for most large brokers.
Acquisitions remain part of the growth equation
Consolidation continues to give brokerages another route to growth, even as deal activity has slowed from the record levels earlier in the decade. Higher borrowing costs have made transactions more difficult to finance, but the sector remains fragmented, with thousands of firms viewed as potential targets.
Two of the largest brokerage transactions announced were Arthur J. Gallagher & Co.’s $13.45 billion acquisition of AssuredPartners and Brown & Brown’s $9.83 billion purchase of Accession Risk Management Group, the parent of Risk Strategies Co. and One80 Intermediaries.
Aon CEO Greg Case said there is still room for buyers in a market with many independent firms. “It’s still a very fragmented market. There are thousands of opportunities out there, and we see room to grow.” Joseph Marinucci, a New York-based senior credit analyst at S&P Global Ratings, expects acquisitions to continue, though buyers may be more selective and use different financing structures.
The industry’s near-term test is whether it can convert AI investment, producer development and acquisitions into dependable growth as property pricing eases. Commercial complexity still supports the role of brokers, but that doesn’t insulate every firm from competition or weaker market conditions. “The obituary for this sector has been written too early on multiple occasions,” said Tim Zawacki, an insurance sector strategist at S&P Global Market Intelligence. For brokers, the next phase will reward firms that pair operating efficiency with credible sales execution and advice clients continue to value.