In 2025, the landscape of financial services has witnessed a remarkable resurgence in mergers and acquisitions, particularly within fintech and insurance. After a period of relative slowdown in deal volumes in 2024, the first half of 2025 demonstrates accelerated market momentum in 2025. Global deal values climbed by roughly 15% year-on-year, even as the number of transactions edged down by 1%. This trend reflects a strategic recalibration as firms seek scale, technology, and new customer segments to stay competitive.

Market Overview and Deal Dynamics

The global financial services sector saw robust activity, with aggregate M&A values rising from H1 2024 to H1 2025. In insurance alone, the previous year’s 13% drop in deal volumes was offset by a 39% surge in total value, driven largely by a surge in mega deals exceeding $5bn. These transactions have reshaped the competitive landscape, as insurers target high-value targets to diversify offerings and strengthen distribution networks.

Regionally, North America recorded its lowest quarterly count of insurance broker deals in four years: just 101 transactions in Q1 2025, down from 125 in the same period the prior year. Despite fewer deals, the focus on higher-value targets kept aggregate transaction totals substantial. Q1 2025 saw $1.73 billion in closed deals, compared to $13.49 billion in Q4 2024, underscoring the shift toward quality over quantity.

Valuations and Purchase Multiples

Valuation multiples continue to climb, reflecting intense competition for assets with predictable revenue streams and strong profitability. Insurance sector M&A is trading at an overall average of 16.2x EV/EBITDA for 2022–YTD 2025, up from 15.2x during 2019–2021. Within distribution, multiples have soared from 13.1x to 16.7x over the same periods, fueled by robust recurring revenue and margins.

The premium paid for assets with strong digital capabilities or insurtech partnerships has never been higher. Buyers, particularly private equity firms, are aggressive in their bids, reflecting expectations of continued growth and margin expansion.

Key Drivers of M&A Activity

Multiple forces are converging to fuel this uptick in transactions:

• cutting-edge AI integration and analytics: Firms are acquiring technology providers to enhance underwriting, risk assessment, and customer personalization through data-driven insights.
• Strategic restructuring and portfolio optimization as companies divest non-core operations and focus on high-growth segments.
• Cross-vertical convergence, with insurers expanding into wealth management and asset management to offer diverse wealth and retirement offerings.
• Persistent activity by private equity, targeting stable insurance distribution channels and specialty finance platforms as core portfolio assets.
• Global expansion strategies, where incumbents exit saturated markets and acquire footholds in high-potential regions across Asia, Europe, and Latin America.

Sector Trends and Noteworthy Transactions

The interplay of technology and traditional financial services has produced several standout deals in early 2025. In wealth management, acquisitions remain a priority, as firms seek scale and product diversification to meet client demand for alternative investments.

• HUB International completed three wealth management acquisitions, including Prestige Wealth Partners in May, and Retirement & Private Wealth books from Steven Glasgow and Jordan Sibler in March, bolstering its approximately $178 billion in assets under management.
• Payments and fintech consolidation continued, exemplified by SoFi’s $1.1 billion purchase of Technisys and Truist Financial’s acquisition of the gamified savings app Long Game, aimed at enhancing digital engagement.
• Insurtech-driven deals accelerated sector-wide digital transformation, with major brokers investing in platforms that streamline policy administration, claims processing, and customer portals.

These transactions underscore the importance of embedding digital-first capabilities within legacy systems, ensuring firms remain agile and customer-centric in a competitive marketplace.

Outlook, Risks, and Future Sentiment

Sentiment among insurance executives remains overwhelmingly positive. Nine out of ten expect to close more deals in 2025 than in 2024, and 81% acknowledge that deal value is increasingly tied to transformative potential. With valuations expected to stay frothy in insurance and related services, competition for high-quality assets is set to intensify.

However, the environment is not without risk. Regulatory frameworks are shifting: the U.S. has eased certain rules while other jurisdictions impose tighter requirements, creating a rapidly evolving global regulatory environment. Political uncertainty and economic volatility add further complexity, sometimes extending deal timelines and due diligence processes.

Private equity firms remain key players but face challenges in executing transactions amid changing credit conditions and heightened scrutiny on valuations. Nonetheless, the pool of dry powder and ongoing search for yield will likely sustain robust activity throughout the year.

Strategic Implications for Market Participants

For incumbents, the imperative is clear: integrate digital capabilities, pursue strategic bolt-on acquisitions, and reshape portfolios to align with evolving customer expectations. For fintech and insurtech entrepreneurs, aligning with well-capitalized partners offers access to scale, regulatory expertise, and distribution networks.

Investors should monitor key metrics—deal volume, average multiples, and the size and frequency of megadeals exceeding $5 billion—to gauge market sentiment and identify entry points. The most successful players will be those that combine deep industry expertise with agility in adopting emerging technologies.

As 2025 progresses, the narrative of M&A in fintech and insurance is one of transformation: a sector propelled by technology, strategic repositioning, and a hunger for scale. Firms that navigate the complexities of integration, regulatory change, and shifting consumer demands will position themselves at the forefront of an industry undergoing profound change.

In this dynamic environment, the value of a well-timed acquisition extends beyond immediate financial returns. It signals a commitment to innovation, customer-centricity, and sustainable growth. As a result, M&A in fintech and insurance will continue to accelerate, charting a course toward a more integrated and digitally empowered future.