These 3 Insurance Brokers Turn Customer Retention Into a Compounding Machine
Insurance brokers collect commissions whether rates rise or fall, but three companies have quietly turned that boring renewal cycle into something that looks a lot like a compounding machine. The question is whether falling property premiums finally break the streak.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
An insurance broker is a middleman with a plain job. It places a company’s coverage with an insurer, collects a commission or fee for the work, and leaves the risk itself on the insurer’s balance sheet. Businesses renew that coverage every year because lenders, landlords, and state laws require it, so broker revenue follows premium levels and client counts. The steadiest part of the model is retention.
On its second-quarter call, Arthur J. Gallagher (NYSE:AJG | AJG Price Prediction) attributed only about one point of its 6% organic growth to insurance rates. New business and client retention supplied the rest. Here are three brokers built on that model.
Brown & Brown: Steady Renewals, Slower Growth, Cheaper Shares
Brown & Brown (NYSE:BRO), based in Daytona Beach, Florida, sells commercial insurance, employee benefits, and personal coverage through a retail segment, and runs a specialty distribution segment built around insurance programs and wholesale placements. Full-year 2025 revenue was $5.902B. The recent Accession acquisition made the company significantly larger, contributing approximately $410 million of revenue in the second quarter alone.
Its dividend record offers a clean look at behavior under stress. With the November 2008 ex-dividend date, in the depths of the downturn, the quarterly payout rose to $0.075 from $0.07, and it moved up again to $0.0775 in November 2009. In the pandemic year, the payout rose to $0.0925 from $0.085 at the November 2020 ex-date. The recent record shows annual increases from $0.085 in 2020 to $0.165 in 2026. The current quarterly dividend is $0.165, up from $0.15, or $0.66 annualized against a share price near $60.12. The yield is modest. The payout’s real value is as a record of discipline through two downturns.
Margins show the business holding its economics in a competitive market. The first-quarter adjusted EBITDAC margin was 38.5%, up from 38.1%. The second quarter was softer, with the adjusted EBITDA margin at 35.7%, down 100 basis points, as lower organic growth and investment in European capabilities weighed on specialty distribution. The shares are down 24% year to date and 35.27% over one year, though up 247.47% over ten years. The stock trades at about 13 times forward earnings.
The main risk is growth. Organic revenue was flat at 0.0% in the first quarter and decreased 70 basis points in the second while management combines two large organizations. The company’s chief executive said on the July 28 call, “While the organic growth for retail is improving, it’s not where we want it to be yet.” Total debt stands near $7.82B, with a $400 million maturity due in December.
Arthur J. Gallagher: A Dividend That Has Risen Every Year Since 2011
Gallagher, headquartered in Rolling Meadows, Illinois, runs two businesses. Brokerage places property, casualty, and benefits coverage for clients and generated $3.502B of second-quarter revenue. Risk management, grounded by the Gallagher Bassett claims operation, handles claims on behalf of clients and brought in $453M, with organic fee growth of 12%. The company employs 72,373 people.
In the years after the meltdown, the quarterly dividend held at $0.32 in both 2009 and 2010. From 2011 through 2026, the quarterly rate rose in every calendar year, most recently to $0.70 from $0.65 with the dividend declared January 28, 2026. That works out to $2.80 annualized, again a small yield on a stock priced near $226.91.
The current property slump is a live stress test. Second-quarter property renewal premiums fell 10%, while renewal premiums excluding property rose 3%, and clients used property savings to buy back coverage and raise limits. The chief executive framed it on the July 30 call: “Every other past soft market, the market has dropped like a brick across every line all at once. This is a property reset.” Gallagher reported 25 consecutive quarters of double-digit adjusted EBITDA growth. Risk management’s adjusted EBITDAC margin expanded to 22.3% from 20.9%, and underlying brokerage margin expanded 50 basis points. The shares are down 11.52% year to date but up 421.28% over ten years, and trade around 16 times forward earnings.
The main risk is integration. AssuredPartners, a $14B deal that closed in August 2025, is the largest acquisition in company history, and total borrowings reached $13.6B. Second-quarter net income fell 11.43% to $324M on $301M of intangible amortization tied to the deal, and contingent revenues declined 8% organically.
Marsh McLennan: Advice Keeps Selling When Insurance Prices Fall
Marsh McLennan (NYSE:MMC) is the largest of the three by revenue. Marsh brokers commercial insurance. Guy Carpenter brokers reinsurance, the coverage insurers buy for themselves. Mercer advises employers on health benefits, retirement, and investments, and Marsh Management Consulting sells strategy work. Second-quarter revenue was $7.404B, split between Risk & Insurance Services at $4.823B and Consulting at $2.602B.
The company is currently operating through a clear pricing downturn. Primary commercial insurance rates fell 6% globally in the second quarter after a 5% decline in the first, and global property rates dropped 12%. Over the same stretch, underlying revenue growth sped up to 5% from 4%. Guy Carpenter’s client retention stayed in the high 90s, and Mercer’s assets under management reached $846 billion. Adjusted EPS was $2.96, up 9%.
Margins have held close to steady. The second-quarter adjusted operating margin was 29.3%, compared with 29.5% a year earlier, and 30.5% for the first six months. The company repurchased $1.5 billion of stock in the first half, retiring 8.7M shares, and now expects to deploy approximately $5.5 billion of capital in 2026 across dividends, acquisitions, and buybacks, up from a prior estimate of $5 billion.
The main risk sits in reinsurance. Property makes up 50% of Guy Carpenter’s global portfolio, and the property catastrophe rate-on-line index declined 16% at mid-year, which management called the steepest year-over-year decline since the index was created 25 years ago. Guy Carpenter revenue slid 2%. A $425M Greensill litigation charge also weighed on first-half GAAP results.
Why These Three Belong in a Durable Core
All three have spent the past year showing what falling insurance prices do to a broker: growth slows, margins dip a little, and renewals keep coming. Two of the stocks have repriced sharply over that stretch, while the businesses underlying continue to place coverage, collect fees, and return cash to shareholders. For a reader building a core holding, the things to watch are organic growth, integration progress, and how long the property reset lasts.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
