Insurance Agency Valuations For Sellers


We valuate your agency by using a mixture of valuation formulas not just one standard formula to come up with a minimum asking price for your agency. Your company is worth what someone is willing to pay. No formula can give you this exact figure. The key to getting the most money for your agency is by doing the upfront presentation properly and getting multiple offers instead of working with just one possible buyer. It is a fact that agents working in a one on one buyer situation will leave an average of 20% on the table.
This situation happens mostly because the seller did not want to pay a small commission or fee. The end result is your hard work is undersold too. Let Insurance Merger Specialists help you succeed in selling your agency.

A Thorough Analysis

We understand not all agencies are set up with all of the information on hand needed for a sales presentation. It is part of our fee to take care of this for you.

We compile the information for your agency pitchbook in a professional format, our accountants get involved to help with the financials, the add backs, and the pro forma.

We take you from start to finish ensuring you the maximum dollar for your agency.

  • Age and employment status of key employees
  • Dependency on large accounts
  • Dependency on a certain industry
  • Age, business life cycle of clients
  • Receivable issues
  • Quality of insurance markets
  • Over-reliance on certain insurance markets
  • Total Premium
  • Non-Standard vs. Preferred Business
  • Direct vs. Agency Bill
  • Historical growth rate
  • Historical profitability of clients for insurance markets
  • Agency location, number of offices
  • Agency Reputation
  • Employee quality and productivity
  • Total Revenue
  • Technology platform, age of technology
  • Sales management
  • Brand and reputation
  • Cash/asset management
  • Office facility
  • Contingent Revenue
  • Adjusted EBIDTA w/ add-backs

Net Revenue Pays the Bills

The volume may play into the valuation if there is an opportunity for the buyer to enhance the net revenue by getting better commission rates, overrides, or contingency income, but generally, the buyer is focused on the real historic revenue.

The discretionary earnings is a pro forma estimation of the total compensation the agency yields to a working owner-operator.

Start with the net income of the business and add back the owner’s salary and other compensation, interest on debts, depreciation/amortization and any non-recurring or non-essential expenses to determine the discretionary earnings.

Process Is the Key

Every great system requires standardized, time-tested, iterated processes and systems of accountability.

Our step-by-step system of assistance takes you through the entire process while ensuring your financial success, peace of mine, and growth.

We typically out perform the standard multiple valuation formulas by more than 20% through market competition.


Some allowances are given if certain expenses can be adjusted going forward without impacting the operation of the business. A pro forma (forward-looking) or adjusted (historic) EBITDA is essentially the discretionary earnings minus a reasonable compensation for either retaining or replacing the owners(s). All three multiples might be net of non-commission income depending on the consistency of the income sources. Every agency has an increased value to a certain buyer. The more buyers that your listing is exposed to increases the chances of obtaining a higher sales price.

Market Value

As discussed, understanding the fair market value of your Agency takes so much more than just multiplying your revenue by some widely discussed multiple. Ultimately, an Agency’s fair market value is determined by its sustainable future earning power. In our experience, the agencies that are selling at the highest multiples are the agencies that operate to best practices. These agencies have considered all factors in the operation of their Agency.

Thus, a thorough agency valuation, updated every few years, provides the proper foundation for planning, growth, and the eventual sale of the agency–all good reasons for getting around to it now.

Every agency has an increased value to a certain buyer. The more buyers that your listing is exposed to increases the chances of obtaining a higher sales price.

Most Common Statement Made Is:

“I Am Going To Sell In 3 To 4 Years.”

Our knowledgeable and experienced team have over 75 years of independent agency, property & casualty consulting and banking/lending experience.