SECTOR PERFORMANCE UPDATE
Mixed results for insurance stocks in the second quarter of 2025
All segments tracked in Mercer Capital’s market-weighted indices lagged the broader market in the second quarter of 2025. Only Insurtech (+9.5%) and Specialty P&C (+3.1%) posted positive market-weighted returns.
Growing evidence of a softening commercial insurance market weighed on both standard lines P&C underwriters and insurance brokers. As shown in the chart to the right, the CIAB reported an average change in commercial insurance pricing of just 3.7% in Q2, while brokers reported decelerating organic growth in Q1 and Q2.
Insurtech’s favorable market-weighted return was propelled almost entirely by Guideline Software, which was up 26% during the quarter and 71% over the last twelve months.
The Managed Care Index was pulled down by its largest constituent (UnitedHealth), which fell 40% during the quarter following reports of DOJ investigations into its Medicare billing practices.
The most notable M&A transaction of the quarter was Brown & Brown’s $9.8 billion acquisition of Accession Risk Management (parent entity of retail broker Risk Strategies and wholesaler One80 Intermediaries). Accession was the 9th largest privately-held insurance broker, per Business Insurance rankings. The transaction implied a 16.4x multiple of pro forma 2024 EBITDA.
Despite the softening rate environment and mixed public company share performance, the second quarter saw four new insurance IPOs (or five, including Accelerant’s July 24 listing). The table on the following page summarizes the market’s generally favorable reaction to the 2025 class of insurance IPOs.