Does an insurance brokerage need the insurers' approval before its book of business can be sold?

Often, yes, at least in practical terms, even where it isn't framed as formal "approval" of the sale itself. Brokerages typically operate under agency agreements with the insurers whose products they place, and those agreements commonly include their own conditions about changes in ownership or control of the brokerage, sometimes requiring notice, sometimes requiring consent, and occasionally allowing the insurer to reassess or terminate the relationship if the brokerage changes hands in a way it doesn't like.

Since a brokerage's book of business is largely built on the ongoing ability to place and service policies with its existing insurer partners, losing or disrupting even one significant insurer relationship as a result of a poorly handled ownership change can meaningfully reduce the value of what a buyer thought it was purchasing. This makes reviewing every material agency agreement, and understanding each insurer's specific change-of-control provisions, an essential and often underestimated part of due diligence in a brokerage sale.

Reaching out to key insurer partners early, rather than after a deal is signed, and building any required consents into the closing conditions of the purchase agreement, protects the value of the book the buyer is actually paying for.