Moody’s predicts a 2024 stable outlook for the insurance brokerage sector, underpinned by constructive global economic growth, a favorable commercial property & casualty (P&C) rate environment, and stable EBITDA margins.

According to Moody’s report, organic growth is to remain in the mid-single digits or higher as economic growth stabilizes and P&C rate increases moderately.

Analysts expect GDP growth for the G-20 economies to stabilize at a modestly lower level in 2024 compared to 2022 and 2023 as the global economy transitions to a post-pandemic equilibrium.

The forecast incorporates a gradual decline in US GDP growth from 2.5% in 2023 to 2.1% in 2024 and 1.8% in 2025, as consumer spending and wage growth slow.

Experts also expect US unemployment will rise to an average of 3.9% in 2024 from 3.6% in 2023, and that the US Federal Reserve will lower the federal funds rate by a cumulative 100 basis points during 2024 to 4.25%-4.50%.

EU GDP is forecast to increase gradually, from 0.5% in 2023 to 0.8% in 2024 and 1.6% in 2025, reflecting real wage growth, diminishing inflation, falling interest rates and improving credit conditions.

According to Moody’s, the European Central Bank will likely also start lowering rates in 2024, and highlighted geopolitical risks and inflation linger as potential threats to this year’s outlook.

Favorable P&C pricing in most lines of business, further growth in insurable exposures, strong client retention and new business generation will also support organic revenue growth in the mid-single digits or higher in 2024, according to the report.

2024 will also see brokers’ EBITDA margins hold steady through strong organic revenue growth and good expense controls.

“Brokers will maintain solid EBITDA margins through 2024 and beyond through strong organic revenue growth and good expense controls. “Interest coverage for investment-grade and speculative-grade brokers decreased slightly over