P&C Insurance - Another Look at Broker Organic; Take the Under (AJG, AON, BRO, MRSH, WTW)

Research evidence excerpt

P&C Insurance - Another Look at Broker Organic; Take the Under (AJG, AON, BRO, MRSH, WTW)

Truist Securities

Equity Research Report May 12, 2026

FINANCIALS: Insurance

P&C Insurance - Another Look at Broker

Organic; Take the Under (AJG, AON, BRO, Mark Hughes, CFA

615-748-4422 MRSH, WTW) Mark.Hughes@truist.com

We evaluate the emerging backdrop for broker organic based on: 1) the long-term

correlation with nominal GDP and P&C rates (R=85%), in this case looking at each

Maxwell Fritscher individual broker’s specific sensitivity to pricing; 2) the historic relationship of average

404-439-9753 organic growth to overall commercial lines premium (R=86%); 3) the connection Maxwell.Fritscher@truist.com

between broker organic and E&S premium growth, which we view as indicator of

carriers’ risk appetite and therefore a useful reflector of pricing (R=92%). We also look

13 Page Document at the historical picture for relative valuation, which suggests the broker stocks have

already factored in the organic deceleration (and then some).

Reasons for this report

Correlation with Nominal GDP and Pricing:

✓ Sector Update

The brokers’ sensitivity to commercial P&C pricing varies across the space. Our

method is to perform regression analyses based on quarterly broker organic that utilizes

nominal GDP and average P&C rates as independent variables and organic growth as

the dependent variable (to be clear, we are only looking at insurance brokerage organic

here and not consulting results). These variables are highly correlated with both average

broker organic growth and with overall commercial lines premium.

What is new in this note is the side-by-side comparison of the coefficients for

each broker, which gauge the change in expected organic growth for each point change

in pricing (Figure 1).