The retirement of experienced brokers in the insurance industry may have a significant impact on mergers and acquisitions (M&A) in the coming years.
According to a recent report by the Insurance Brokers Association of Canada (IBAC), the average age of brokers in Canada is 45 years old. This means that a large number of brokers will be reaching retirement age in the next decade.
This trend is expected to have a ripple effect on the M&A landscape, as many brokers may choose to sell their businesses rather than pass them on to the next generation. This could lead to an increase in M&A activity as larger brokerages look to acquire smaller ones.
However, the report also highlights potential challenges that may arise from this trend. One concern is the potential loss of expertise and knowledge as experienced brokers retire. This could have a negative impact on the quality of service and advice provided to clients.
Another issue is the potential for a shortage of qualified brokers in the industry. With a large number of brokers retiring, there may not be enough new brokers entering the industry to fill the gap. This could lead to a shortage of talent and a more competitive job market for new brokers.
The IBAC report also notes that the retirement of brokers may have a significant impact on the succession planning of brokerages. With many brokers choosing to sell their businesses, it may become more difficult for smaller brokerages to find suitable successors.
In light of these potential challenges, the report suggests that brokerages should start planning for succession early on. This could involve developing a formal succession plan, mentoring younger brokers, and investing in training and development programs.
Overall, the retirement of brokers is expected to have a significant impact on the M&A landscape in the insurance industry. While it may lead to increased consolidation and M&A activity, it also presents challenges that must be addressed by brokerages and industry organizations.
