How much is an insurance agency worth?
Short answer: a multiple of EBITDA, typically from the mid-single digits to the mid-teens. The useful answer is what decides where in that range you land — because the gap between the bottom and the top of it is not a rounding error, it is two or three times the money.
Two numbers set the price. Your EBITDA, and the multiple a buyer applies to it. Almost everything an owner can influence works through one or the other, and the two are not equally easy to move.
MarshBerry, how to calculate an insurance firm's valuation — who advise on these transactions rather than write about them — put the typical range for insurance brokerage at "mid-single digits to the mid-teens", with higher multiples going to firms that are larger, growing faster, or more consistently profitable. Specialty distributors sit above that entirely: firms with delegated authority averaged 19.4x pro forma EBITDA in MarshBerry, 2025–2026 valuation update's 2025 transactions.
Why earnings are worth about seven times what they look like
This is the part that changes how an owner should think about the next two years.
At a 7.0x multiple, each $1 of increased earnings translates to $7 in additional firm value. A cost removed permanently is worth about seven times what it saves this year.
At a 7x multiple, one additional dollar of sustainable earnings adds roughly seven dollars of enterprise value. A cost you remove permanently, or a productivity gain that holds, is not worth what it saves this year — it is worth about seven times that at exit.
Which is also why the margin gap matters so much. Top independent firms run EBITDA margins of 25–30%+ against an industry norm of 15–20%. On the same revenue, that difference is most of the value of the business.
On identical revenue, the gap between a typical firm and a top one is most of the difference in enterprise value — it raises earnings AND signals the consistency that supports a higher multiple.
| Industry norm (low) | 15% |
|---|---|
| Industry norm (high) | 20% |
| Top independent firms | 25% |
| Top firms (high end) | 30% |
Margin ranges per MarshBerry, how to calculate an insurance firm's valuation.
What actually moves the multiple
Buyers are pricing two things: how much the earnings will grow, and how likely they are to survive the transaction. The second is underrated by almost every seller.
| Driver | Moves | Why a buyer cares |
|---|---|---|
| Book retention | The multiple | Predicts whether the earnings survive the transaction at all. |
| Organic growth | The multiple | Distinguishes a real producer pipeline from rate-driven revenue. |
| EBITDA margin | Earnings and multiple | Raises the number being multiplied, and signals consistency. |
| Owner dependency | The multiple | Earnings attached to a departing person are earnings they may not keep. |
| Revenue per employee | Earnings | The clearest proxy for whether the cost structure is efficient. |
| Revenue concentration | The multiple | A book resting on a few accounts is priced as the risk it is. |
| Tech enablement | The multiple | Not the software — the transferability, measurement and retention it produces. Hits four other rows at once. |
| Line of business | Multiple and method | Recurring P&C commission is priced differently from front-loaded life. |
| Reproducible reporting | The multiple | Numbers assembled for diligence get discounted. Measured ones don't. |
| Size | The multiple | Real, and the one thing on this list you can't change before an exit. |
Rows that move the MULTIPLE matter disproportionately: the multiple applies to every dollar of earnings at once, so a turn gained there beats a good year.
Notice how many rows are about risk rather than performance. A buyer discounts uncertainty, and the discount is applied to the multiple — which means it hits every dollar of earnings at once rather than costing you a year's profit.
Retention is the one number that decides the range
Everything else is negotiable around it. Book retention is the single biggest driver of what an agency is worth: above 90% earns a premium multiple, below 80% compresses it. And retention is decided entirely after the sale is written — by servicing, renewals, and whether anyone noticed the client was drifting.
Book retention is the single biggest driver of agency valuation: above 90% earns a premium multiple, below 80% compresses it. That is decided entirely after the sale.
Which is why the part of the business most owners under-invest in is the part priced most heavily at exit. Writing more business raises revenue. Keeping it raises the multiple, and the multiple applies to everything.
The discount nobody prices until diligence
MarshBerry lists reducing owner dependency as one of two broad ways to raise value, alongside growth and cash flow. That phrase is worth sitting with, because it is the polite name for a specific question a buyer is asking:
If you left tomorrow, what leaves with you?
If the answer includes the carrier relationships, the renewal calendar, the reason each large account stays, the commission grid, or which producer is actually productive — then a share of the earnings being valued is attached to a person who is about to be paid and go home. Buyers know this. They do not raise it early; they raise it in diligence, as a reason for a lower multiple, more earnout and less cash at close.
Tech enablement is a valuation driver, not a line item
This is the one most owners treat as overhead and buyers treat as risk pricing. A tech-enabled agency is worth more than an identical one run on memory and spreadsheets, and it is worth more through four of the drivers in the table above at once — owner dependency, retention, margin and reproducible reporting. Because those all move the multiple rather than the earnings, the effect compounds across every dollar the business makes.
One distinction worth keeping, because it changes what you invest in: a buyer is not paying for your software licence — they could buy the same one on Monday. They are paying for the operating capability it produced, and that is not for sale anywhere. It takes years of use to exist, and an acquirer folding your book into their operation is buying precisely that: a business that can be run by someone who did not build it.
Which is why "we run on systems" is not a soft claim at the table. It is the difference between acquiring a book and acquiring a person. Three things specifically:
A book that isn't in someone's head. Every client's history, every conversation, every renewal date, retrievable by someone who has never met them. That is the direct answer to the owner-dependency question, and it is worth a turn of the multiple far more often than it is worth a line in a pitch.
Numbers that survive diligence. Retention by cohort, revenue per employee, producer-level production, source-level economics — produced by the system rather than assembled by a person the week the buyer asks. Assembled numbers get discounted for uncertainty; measured ones do not.
Retention that holds without the owner in the room. If renewals are chased because the system chases them, they keep happening after the person who used to remember has gone. If they happen because someone remembers, they are a key-person risk wearing a retention rate.
| A buyer is not paying for | They are paying for |
|---|---|
| Your CRM subscription | A book retrievable by someone who has never met the client |
| The dashboard in the demo | Retention and producer numbers the system produces, not a person |
| Automation in the abstract | Renewals that still get chased after the owner leaves |
| A tidy tech stack | A shorter answer to "what leaves if you leave?" |
None of this requires owning technology. It requires the operating discipline that using it imposes — available to a five-person agency on licensed software.
None of that requires owning technology, which is the good news — the discipline is available to a five-person agency on licensed software, and it is exactly what a buyer is checking for.
Line of business changes the model, not just the number
Everything above assumes a book valued on a multiple of EBITDA, which is how commission-based P&C and benefits agencies trade. What you sell moves that multiple — and in some lines it changes the method entirely, which is a bigger deal than most valuation content admits.
| What you sell | How it's usually valued | Why |
|---|---|---|
| Personal lines P&C | EBITDA multiple, at the lower end | Renews annually and predictably, but margins and account sizes are thinner. |
| Commercial P&C | EBITDA multiple, higher | Same recurring commission, larger accounts, stickier relationships. |
| Employee benefits / specialty | EBITDA multiple, higher again | Recurring, specialised, and harder for a buyer to replicate. |
| Life & final expense | Often on the renewal stream instead | Compensation is front-loaded, so this year's earnings reflect this year's writing rather than the book held. What persists is what gets valued. |
| Medicare | Renewal / trail based | Commission is largely renewal-driven, so the in-force book is the asset. |
| Delegated authority (MGA, MGU, program) | Materially higher | Averaged 19.4x pro forma EBITDA on 2025 transactions — a different business from distribution. |
Ordering is well established; specific multiples vary by size, growth and profitability and should not be read off a table. Delegated-authority figure per MarshBerry, 2025-2026 valuation update: firms with delegated authority.
The reason is recurring revenue. A P&C book renews annually at close to full commission, so next year's earnings are largely visible from this year's book — which is exactly what a multiple of earnings prices.
Life and final expense work differently. Compensation is heavily front-loaded, so a producing agency's earnings are mostly a function of what it wrote this year rather than what it holds. Renewals and trails are real but far smaller, so these books are frequently valued on the renewal stream itself rather than on an EBITDA multiple — and an agency whose revenue depends on continuing to write at the same rate is, from a buyer's perspective, closer to buying a sales operation than buying a book.
That has a practical consequence worth sitting with: in a front-loaded line, the thing that creates enterprise value is the part that persists — renewals, retention, and the systems that keep production repeatable without the owner. It is the same conclusion as everything above, arrived at from the opposite direction.
If you might sell in the next two years
Fix retention first. It moves the multiple, and the multiple applies to every dollar. Nothing else on this page has that property.
Make the numbers reproducible. Not accurate once — reproducible. A buyer will ask for the same figure cut three ways, and the agencies that struggle are the ones whose reporting is a person.
Write down what only you know. Then move it into the system. The goal is that the honest answer to "what leaves if you leave" gets shorter every quarter.
Fix margin before you chase revenue. Revenue growth with flat margin moves EBITDA linearly. Margin improvement moves it and can move the multiple, and it is levered about sevenfold either way.
Common questions
How much is an insurance agency worth?
Agencies are generally priced as a multiple of EBITDA, and MarshBerry — who advise on these transactions — put the typical range for insurance brokerage at mid-single digits to the mid-teens. Where a specific agency falls depends mainly on size, organic growth, profitability and risk. Firms with delegated authority, such as MGAs and program administrators, sit well above that range and averaged 19.4x pro forma EBITDA in MarshBerry's 2025 transactions.
What is the biggest driver of an insurance agency's valuation?
Book retention. Above 90% earns a premium multiple and below 80% compresses it, and because it moves the MULTIPLE rather than the earnings, the effect applies to every dollar of EBITDA at once. It is also the metric most owners under-invest in, because it is decided entirely after the sale is written — by servicing, renewals and whether anyone noticed a client drifting.
How do I increase the value of my insurance agency?
Through earnings, the multiple, or risk. Earnings are levered: at a 7x multiple, one additional dollar of sustainable EBITDA adds roughly seven dollars of enterprise value, so a permanent cost removal is worth about seven times what it saves this year. The multiple moves mainly on retention, organic growth and consistency. Risk is reduced by cutting owner dependency and diversifying revenue.
Does technology increase an insurance agency's valuation?
Not directly — no buyer pays a higher multiple because you license a CRM, and the software is not proprietary to you. What buyers do pay for is the state that running systems produces: a book that is not in one person's head, numbers reproducible under diligence rather than assembled the week they are asked for, and retention that continues after the owner leaves. Those directly answer the owner-dependency question buyers price.
What EBITDA margin should an insurance agency have?
Top independent firms run EBITDA margins of 25% to 30% or more, against an industry norm of roughly 15% to 20%. On identical revenue that gap accounts for most of the difference in enterprise value, because it raises earnings and signals the operational consistency that also supports a higher multiple.
What is owner dependency and why does it lower the price?
It is the share of the business that would leave with the owner — carrier relationships, the renewal calendar, the reason large accounts stay, the commission grid, knowledge of who is actually productive. Buyers rarely raise it early. They raise it in diligence, as grounds for a lower multiple, a larger earnout and less cash at close, because earnings attached to a departing person are earnings they may not keep.
Virtual Closer is the operating layer underneath most of this: one record holding conversations, calls, policies and comp, retention and persistency tracked rather than remembered, and producer- and source-level economics the system produces instead of a person assembling them the week a buyer asks.