Quality Thesis

If you feel like the headlines about ransomware attacks, epic hailstorms or billion-dollar lawsuits are coming faster than ever, you’re not imagining things. Modern business is awash in new, unfamiliar risks—and that is exactly why a handful of giant insurance brokers have become indispensable partners for everyone from local cafés to Fortune 500 multinationals.

Meet the “Super Six”

The names to remember are Marsh McLennan (MMC), Aon, Arthur J. Gallagher (Gallagher), Willis Towers Watson (WTW), Brown & Brown, and Ryan Specialty. Together they already arrange more than half of the world’s commercial insurance premiums and they just keep getting bigger:

• Marsh McLennan finished 2024 with $24.5 billion in revenue, up 8% year-on-year.
• Aon turbo-charged growth by absorbing middle-market powerhouse NFP in April 2024.
• Gallagher is spending $13.45 billion to buy AssuredPartners, its largest deal ever, due to close this year.
• WTW posted $9.9 billion of 2024 revenue, a 5 % lift despite shedding its TRANZACT unit.
• Brown & Brown broke through $4.8 billion in annual sales and now runs more than 500 branch offices.
• Ryan Specialty kept its “hyper-growth” tag, with 2024 revenue up 24.5 %

So What Do These Firms Actually Do for You?

Think of a broker as your risk concierge. They comparison-shop hundreds of insurers, design tailor-made policies, fight for claims payments and, more and more, crunch data to spot trouble before it hits. For companies without their own risk department—i.e., most businesses—that expertise can be the difference between a nasty surprise and a survivable hiccup.

Where the Moat Comes From

• Sheer Scale = Better Deals
  When a broker steers tens of billions of premium toward carriers, it can negotiate broader cover and lower rates than any standalone buyer ever could. That purchasing power is something new entrants simply can’t fake overnight.
• Data & Analytics
  These firms harvest oceans of claims information, then feed it into AI platforms to predict losses and price programs in real time. Academic consultants still call this a “data moat,” and although external data is chipping away at the walls, incumbents remain several laps ahead.
• Licenses Everywhere
  Want to place a policy in Brazil, Kenya or Indonesia? The paperwork alone can take years. Marsh, Aon and WTW already hold the permits and boots-on-the-ground talent in over 120 countries, making them the default choice for multinationals.
• Sticky Relationships
  Switching brokers means re-educating a new team on every detail of your risk profile. Most clients don’t bother; retention rates hover around 90 % for the big six.
• The M&A Flywheel
  Every year they swallow dozens of small regional agencies, bolt on specialty teams (think cyber or renewable-energy experts) and instantly widen their moat. Gallagher’s AssuredPartners deal is only the latest headline example.

Why Their Growth Spurt Isn’t Over

1. Risk is Getting Weirder – Cyber premiums, climate-driven property covers and supply-chain insurance are all growing at double-digit clips.
2. Premium Inflation Helps – Even when policy counts stay flat, higher insured values and bigger loss limits lift brokers’ commission pools.
3. Still Lots to Buy – The U.S. alone has more than 30,000 independent agencies; roll-ups can go on for decades.
4. Capital-Light Model – Brokers need almost no hard assets, so free cash converts straight into share buybacks or the next acquisition spree.

The What-Could-Go-Wrong Section

Regulators could push back on mega-deals, technology could let some straightforward policies be sold direct and talent poaching is a perennial worry. Yet so far, each challenge has been met with either adaptation (brokers buying insurtech startups) or sheer financial muscle (an extra compliance department is just a rounding error on $10-plus billion of revenue).

Bottom line for quality-first, capital-light investors

You want businesses that rake in cash without sucking up capital, that earn more on each incremental dollar than it costs them to raise it, and that can defend those returns for years on end. The global insurance brokers tick every one of those boxes.

• Cash gushers, not cash burners. Marsh McLennan converted its 2024 revenue into almost $4 billion of free cash flow at a 16 % margin—with cap-ex still south of 1 % of sales. Aon isn’t far behind, throwing off $2.8 billion of FCF even in a heavy acquisition year.
• Excess returns on capital—before goodwill is even an issue. GuruFocus puts Marsh McLennan’s ROIC at 9.7 % versus a 7.7 % WACC and Aon’s ROIC at 7.6 % versus a 6.9 % WACC. Strip out the goodwill piled up from decades of deal-making and the return on tangible capital soars into the 40–60 % range—pure compounding power.
• Revenue that sticks. Industry studies show top agencies hang on to roughly 90 % of their book every year; clients simply don’t re-bid complex global programs unless something has gone badly wrong. That loyalty smooths cash flows through every economic cycle.
• Owner-friendly capital allocation. Aon still found room to buy back about $1 billion of stock in 2024 while digesting its $13.4 billion NFP purchase. Gallagher is recycling its own firehose of cash into the $13.45 billion AssuredPartners deal, enlarging its moat and earnings base without stretching the balance sheet.

Put simply, these brokers epitomize the capital-light, high-ROIC profile: minimal hard assets, durable pricing power, and management teams that either hand you the surplus in buybacks and dividends or reinvest it in bolt-ons that meet the same return hurdles. For investors hunting long-term compounders that can thrive in almost any macro backdrop, the “super six” insurance brokers aren’t just safe harbors—they’re engines of steady wealth creation.