Moody’s Ratings believes artificial intelligence and broader technology spending will become increasingly important to how insurance brokers improve productivity and sustain profitability in the years ahead. As insurance prices ease and the economic backdrop becomes less supportive, the agency expects brokers with stronger data infrastructure and well-executed technology plans to be better equipped to streamline operations, deepen client engagement and reinforce long-term earnings.
According to Moody’s, the firms most prepared to benefit are those that have already standardized internal data and successfully combined information from acquired businesses. That foundation gives brokers a stronger platform for applying AI across daily workflows, helping them operate more efficiently while also sharpening their commercial decision-making.
Where AI Could Add the Most Value
Moody’s expects AI usage to expand across a range of administrative and client-facing functions. Areas such as policy submissions, policy reviews and billing could become more automated, while AI tools may also help brokers uncover sales opportunities, evaluate client risk needs and react faster to changing insurer appetite.
The agency does not expect an immediate jump in profits from these initiatives. Many brokers are still directing savings and operational gains back into technology systems, data programs and specialized talent. Even so, Moody’s sees these investments as supportive of stronger business generation, better productivity and gradual margin improvement over time, especially for firms that combine scale, innovation and high-quality data assets.
Operational Benefits Come With Added Risk
While the long-term upside is meaningful, Moody’s also warns that wider AI adoption introduces new forms of exposure. Greater dependence on AI can increase vulnerability to cybersecurity incidents, weak data quality, governance failures and model-related mistakes.
Problems in these areas could lead to business disruption, remediation expenses, professional liability claims and reputational harm. For that reason, Moody’s says brokers expanding their AI capabilities will need robust oversight, disciplined risk controls and effective governance frameworks to manage these threats responsibly.
Why Major Brokers Still Hold Their Position
Despite the rapid pace of digital change, Moody’s does not see AI as a material threat to the core value proposition of major insurance brokers. Although digital platforms and direct distribution channels continue to evolve, large brokers remain concentrated on advising medium-sized and large businesses with complex insurance and employee benefits requirements.
Moody’s argues that these advisory-led services are difficult to automate fully. The ability to structure solutions, interpret complex risks and guide clients through changing market conditions should continue to preserve the relevance of established brokerage firms.
Growth Across the Sector Is Expected to Moderate
The favorable long-term case for technology investment comes as overall sector growth begins to cool. Moody’s forecasts that in 2026, organic revenue growth for investment-grade brokers and speculative-grade retail brokers will slow to the low-to-mid-single-digit range. Wholesale and specialty brokers are expected to post mid-single-digit growth, which is notably below the double-digit gains seen in recent years.
The agency says the brokerage market is moving on from an unusually strong period supported by economic expansion and sustained increases in property and casualty insurance pricing. Conditions are now becoming more demanding as property insurance rates decline, even though some casualty lines are still seeing price increases.
Moody’s notes that brokerage organic growth is closely tied to both economic momentum and insurance pricing. Average organic revenue growth among investment-grade brokers has already cooled from high-single-digit levels recorded between 2021 and 2024 to roughly 3% to 4% in recent quarters, and the agency expects muted conditions to persist through 2026.
Specialty Markets and Pricing Trends Are Also Shifting
Wholesale and specialty brokers, which have been among the industry’s strongest performers, are also losing some momentum. Moody’s says brokers active in excess and surplus markets benefited from strong demand for specialized coverage and from insurers’ ability to respond quickly to changing risk environments. However, falling property insurance rates have weakened that growth outlook, leading the agency to project only mid-single-digit organic growth for the segment next year.
Competition in commercial insurance is also becoming more intense. Moody’s points to market data showing that commercial pricing continued to soften through 2025, with rate declines affecting lines including commercial property, directors’ and officers’ liability, workers’ compensation and cyber insurance. That pressure is expected to continue into 2026 as insurer capacity remains ample.
Margins, Credit Quality and Deal Activity Remain Stable
Even with softer pricing weighing on revenue trends, Moody’s expects profitability across the sector to remain relatively steady. EBITDA margins are forecast to stay broadly stable, supported by disciplined expense control and continued efforts to improve efficiency. Large diversified brokers are pursuing incremental margin expansion through technology-led productivity gains, while outcomes for smaller firms may differ depending on business mix and acquisition activity.
Credit fundamentals are also expected to remain sound. Moody’s projects that investment-grade brokers will hold median debt-to-EBITDA near 3x, while speculative-grade firms should stay in a pro forma range of 6.5x to 7.5x. Recurring revenue, flexible cost bases and strong cash flow generation continue to support leverage management across the industry.
Consolidation remains an important theme, although dealmaking is likely to continue at a slower pace than before. Major transactions completed over the last two years significantly broadened the capabilities and market presence of leading brokers, particularly in the U.S. middle market. Now, many firms are concentrating more on integrating those acquisitions, which is reducing overall transaction volume.
Moody’s says outstanding debt among rated insurance brokers reached about $162 billion as of May 2026, reflecting both acquisition financing and broader sector expansion. Even so, the agency considers debt maturity profiles manageable and expects companies to refinance obligations well in advance of due dates.
Overall, Moody’s maintains a stable outlook for the insurance brokerage sector over the next 12 to 18 months. Although growth is set to slow as pricing normalizes and economic conditions soften, the agency believes continued investment in AI, data analytics, technology infrastructure and operational efficiency will help brokers protect profitability, strengthen competitive standing and support long-term performance.
