Insurance Agency Revenue Multiples: 2026 Market Data
Current market data on P&C insurance agency revenue multiples, earnings multiples, and the operating factors that move valuations up or down in 2026.
The current market range for P&C insurance agency revenue multiples is 1.1x to 2.2x annual premium, with a median of 1.54x. Earnings multiples (based on owner earnings/SDE) range from 1.8x to 3.7x, with a median of 2.80x. Per BizBuySell's insurance agency valuation benchmarks, the median asking price for a P&C insurance agency listing is $590,000, with median annual revenue of $380,000 and median owner earnings of $208,000. Asking-price medians track active listings rather than closed deals, so read them as a starting ceiling, not a clearing price. Agencies with 90%+ retention, commercial-heavy books and documented systems command the high end of these ranges, while personal lines agencies with sub-80% retention fall at the low end.
Understanding these multiples is critical whether you're buying, selling or just curious about what your book is worth. This guide breaks down the current market data, what drives multiples up or down and how to use this information to make smarter decisions.
What Are the Current 2026 Market Multiples for P&C Agencies?
What Does the Revenue-Multiple Range Look Like in 2026?
Industry range: 1.1x - 2.2x annual premium Median: 1.54x
What this means:
- A $500K revenue agency is typically valued at $550K - $1.1M
- Most agencies fall in the 1.3x - 1.8x range
- Outliers (very high or very low quality) push the range wider
Breakdown by quality tier:
| Tier | Revenue Multiple | Characteristics |
|---|---|---|
| Elite | 2.0x - 2.2x | 90%+ retention, commercial-heavy, documented systems, growing |
| Strong | 1.7x - 1.9x | 85-89% retention, mixed book, good systems |
| Average | 1.4x - 1.6x | 80-84% retention, personal-heavy, owner-dependent |
| Weak | 1.1x - 1.3x | <80% retention, declining revenue, high churn |
These ranges align with third-party data: Peak Business Valuation reports average revenue multiples of 1.82x-2.33x for insurance agencies, while ExitWise documents commission multipliers from 1.0x-3.5x depending on agency quality and size.
"Agencies usually sell between 8x-12x EBITDA, so conservatively multiplying by 7x-11x can give you a better idea of the high and low ends of your possible valuations." Sica Fletcher, #1 S&P-Ranked Insurance M&A Advisory Firm (Sica Fletcher)
How Do Earnings (SDE) Multiples Compare to Revenue Multiples?
Industry range: 1.8x - 3.7x owner earnings (SDE) Median: 2.80x
What is SDE (Seller's Discretionary Earnings)?
- Net profit
- Plus: Owner salary, benefits, discretionary expenses (meals, travel, car, etc.)
- Plus: Any one-time or non-recurring expenses
- Equals: Owner earnings = the true cash benefit the owner receives
Example:
- Net profit: $100,000
- Owner salary: $80,000
- Benefits (health, 401k, etc.): $15,000
- Discretionary (meals, car, etc.): $8,000
- SDE = $203,000
Valuation:
- Low end: $203K × 1.8 = $365,400
- High end: $203K × 3.7 = $751,100
- Median: $203K × 2.80 = $568,400
Why Two Different Methods?
Revenue multiples are simpler and more commonly used by brokers and sellers (higher numbers = better marketing).
Earnings multiples are preferred by sophisticated buyers and private equity because they account for profitability, not just top-line revenue.
In practice:
- Sellers quote revenue multiples ("My agency is worth 1.8x revenue!")
- Buyers calculate earnings multiples ("Actually, based on your profit margin, this is only 2.3x earnings, below market median")
- The final sale price is usually a negotiation between the two methods
Pro tip: If you're selling, know both numbers. If you're buying, always calculate both and use whichever is lower to justify your offer. For a detailed breakdown of why these two methods diverge, see revenue multiple vs EBITDA multiple.
What Moves Multiples Up or Down?
Not all agencies are worth the same multiple. Here's what actually drives valuations:
Factor 1: Why Is Client Retention Rate the Number One Multiple Driver?
Impact: ±15-20% on final valuation
| Retention Rate | Effect on Multiple |
|---|---|
| 90%+ | +15-20% |
| 85-89% | +5-10% |
| 80-84% | Baseline (median multiple) |
| 75-79% | -10-15% |
| <75% | -20%+ or unsellable |
Why retention matters:
- High retention = predictable revenue = lower risk for buyer
- Low retention = buyer is essentially buying a sales job, not a business
Example:
- $500K revenue agency with 92% retention: Valued at 1.8x - 2.0x = $900K-$1M
- $500K revenue agency with 76% retention: Valued at 1.2x - 1.4x = $600K-$700K
Same revenue. $300K valuation difference.
Factor 2: How Does Book Composition Move the Multiple?
Impact: ±20-30% on final valuation
| Book Type | Typical Multiple Range |
|---|---|
| 100% Commercial | 1.8x - 2.2x |
| Mixed (50/50) | 1.4x - 1.8x |
| 100% Personal Lines | 1.1x - 1.5x |
Why commercial commands higher multiples:
- Higher revenue per policy (less work for the same premium)
- Better retention (business owners are stickier than consumers)
- Harder to self-shop (complex placements require expertise)
- Stronger relationships (you're advising the business, not just selling a commodity)
Example:
- $500K all-commercial agency: 1.9x = $950K
- $500K all-personal agency: 1.3x = $650K
$300K difference for the same revenue.
Factor 3: How Much Do Systems and Documentation Add to the Multiple?
Impact: ±10-15% on final valuation
Agencies with documented systems sell for 10-15% more than agencies where "it's all in the owner's head."
What buyers want to see:
- Written SOPs for renewals, claims, new business, onboarding
- CRM with clean, organized data (not just contact info, client notes, policy details, renewal dates)
- Automated workflows (renewal reminders, email campaigns, birthday messages)
- Cross-trained staff (if the owner disappears, the agency still runs)
Agencies without systems:
- Buyer knows they're buying a job, not a business
- Retention risk is higher (owner leaves = clients may churn)
- Transition is harder and longer
Example:
- $500K agency with full documentation: 1.7x = $850K
- $500K agency with zero documentation: 1.4x = $700K
Factor 4: How Does Growth Trajectory Affect the Multiple?
Impact: ±5-10% on final valuation
| Revenue Trend | Effect on Multiple |
|---|---|
| Growing 5-10%/year | +5-10% |
| Flat (±2%/year) | Baseline (median multiple) |
| Declining 5-10%/year | -10-15% |
| Declining 10%+/year | -20%+ or unsellable |
Important nuance: Flat revenue with strong retention is fine. Buyers understand that a seller in retirement mode isn't actively prospecting. As long as the book is healthy and clients are renewing, flat revenue doesn't hurt the multiple.
What hurts the multiple: Flat revenue with declining retention. That signals the book is aging and clients are leaving.
Factor 5: How Much Does Carrier Diversification Lift the Multiple?
Impact: ±5-10% on final valuation
Green flag:
- 5+ carrier appointments
- No single carrier >40% of revenue
- Top-tier carriers (Progressive, Travelers, Safeco, Hartford, etc.)
Red flag:
- Single-carrier dependency (60%+ of revenue from one carrier)
- Obscure or regional carriers that buyers don't have access to
- Non-transferable appointments
Example:
- $500K agency with 6 carriers, no concentration: 1.6x = $800K
- $500K agency with 80% revenue from one carrier: 1.3x = $650K
Factor 6: How Wide Is the Captive-vs-Independent Multiple Gap?
Impact: ±10-15% on final valuation
Independent agencies sell for 10-15% more than captive agencies because:
- Buyer owns the expirations outright
- No carrier approval needed for transfer
- More flexibility (can move clients between carriers)
Captive agencies (State Farm, Allstate, Farmers) face transfer risk, the carrier has to approve the buyer and the expirations technically belong to the carrier, not the agent.
Exception: Captive agencies with very strong retention and carrier approval likelihood can still sell for median multiples.
Factor 7: Why Does Carryback Deal Structure Push the Multiple Higher?
Impact: ±5-10% on final valuation
Sellers who offer carryback financing can often command a 5-10% premium over all-cash sales because:
- Bigger buyer pool (easier to qualify)
- Faster close (no bank approval)
- Buyer saves on interest (3-5% vs. 8-10% bank rates)
Example:
- $500K agency, cash-only: 1.5x = $750K
- $500K agency, carryback offered: 1.6x = $800K
Seller nets more because they're offering financing (and collecting interest income on top of the higher purchase price). See our full seller carryback financing guide for structuring details.
How Do Multiples Apply in Practice Across Different Agencies?
To illustrate how these multiples work, here are three hypothetical agency profiles:
How Would the Multiple Land on a Midwest Personal-Lines Agency?
- Annual Premium: $320,000
- Book Type: 85% personal auto/home, 15% commercial
- Retention: 82%
- Systems: Minimal documentation, owner-operated
- Estimated Valuation: ~$450,000 (1.41x revenue)
- Outlook: An agency like this would likely sit on the market longer due to personal-lines-heavy composition and average retention
How Would the Multiple Land on a Colorado Mixed Book?
- Annual Premium: $580,000
- Book Type: 55% commercial, 45% personal
- Retention: 89%
- Systems: Full SOPs, clean CRM, automated workflows
- Estimated Valuation: ~$1,050,000 (1.81x revenue)
- Outlook: Strong retention and commercial mix would position this for a faster sale
How Would the Multiple Land on a Florida Commercial Agency?
- Annual Premium: $750,000
- Book Type: 100% commercial (GL, property, workers comp)
- Retention: 93%
- Systems: Fully documented, 2 full-time employees
- Estimated Valuation: ~$1,575,000 (2.1x revenue)
- Outlook: A profile like this would likely attract multiple offers in today's PE-driven market
General pattern: In our marketplace experience, agencies priced at or near the median multiple for their quality tier tend to sell faster than those priced significantly above it.
How Should You Use This Multiples Data in Practice?
How Should You Use the Multiples Data If You Are Selling?
-
Calculate your range:
- Revenue multiple: Annual premium × 1.1 to 2.2
- Earnings multiple: Owner earnings × 1.8 to 3.7
-
Adjust based on your value drivers:
- Retention 90%+? Add 15%
- Commercial-heavy? Add 20-30%
- Documented systems? Add 10%
- Growing? Add 5-10%
-
Set your asking price:
- True target (based on market comps)
- Plus 10-15% negotiation room
-
Offer carryback financing:
- Increases buyer pool
- Justifies 5-10% premium
- Faster close
How Should You Use the Multiples Data If You Are Buying?
-
Run both multiples on every listing:
- Revenue multiple
- Earnings multiple (after calculating true SDE)
-
Use the lower number as your justification:
- If revenue multiple says $800K but earnings multiple says $650K, offer $675K and defend it with the earnings data
-
Adjust your offer based on red flags:
- Retention <80%? Offer 10-15% below asking
- No documentation? Offer 10% below asking
- Declining revenue? Offer 15-20% below asking
-
Walk away if it doesn't make sense:
- If you can't justify the asking price with market data, pass
What Industry Trends Are Reshaping Agency Multiples Right Now?
Trend 1: Why Are Commercial Multiples Rising?
Private equity and aggregators (Acrisure, AssuredPartners, etc.) are driving up valuations for commercial-focused agencies. In hot markets, commercial agencies are selling for 2.2x - 2.5x revenue, above the historical range.
Why: Recurring revenue + predictability + scalability = PE firms will overpay.
MarshBerry's year-end data confirms this trend: private capital-backed buyers represented 73.5% of all brokerage transactions through November 2024, with aggregate deal values increasing 72% to $49.4 billion despite fewer total transactions, per Deloitte.
Impact: If you have a commercial book, this is a great time to sell.
Trend 2: Why Are Personal-Lines Multiples Compressing?
Personal lines agencies (especially auto-heavy) are seeing declining multiples due to:
- Rate increases pushing clients to shop
- Direct-to-consumer competition (Lemonade, Root, etc.)
- Lower retention rates industry-wide
Impact: If you have a personal lines book, improve retention before you list or expect lower multiples.
Risk & Insurance reports that the insurance brokerage sector maintained 476 deals in 2024, nearly matching 2023's 485, but the average deal value spiked 207% due to mega-transactions like the $7.6B Truist Insurance Holdings deal.
Trend 3: Why Is Carryback Financing Becoming the Default Structure?
Buyers are rejecting bank financing in favor of seller carryback because:
- 8-10% bank interest is unaffordable for most buyers
- Sellers are deferring taxes and earning interest income
- Deals close faster
Impact: Sellers who refuse to offer carryback are seeing their agencies sit on the market 2-3x longer.
Trend 4: Why Are Agencies Without Systems Harder to Sell?
Buyers (especially younger agents) want turnkey businesses, not "jobs." Agencies that are owner-dependent or have zero documentation are selling for 15-20% discounts or not selling at all.
Impact: If you're planning to sell in the next 3-5 years, spend the next 6 months documenting your systems. It'll add $50K-$150K to your sale price.
What Are the Most Common Agency Valuation Mistakes?
Mistake 1: Why Is Using Outdated Multiples So Costly?
The mistake: "I heard agencies sell for 2.5x revenue, so that's what mine is worth."
Reality: 2.5x revenue is the high end for elite commercial agencies. Most agencies sell for 1.3x - 1.7x.
Fix: Use current market data (this guide) or our valuation calculator.
Mistake 2: How Does Confusing Revenue With Earnings Distort Valuation?
The mistake: "My agency does $500K in revenue, so it's worth $500K × 2.8 = $1.4M."
Reality: The 2.8x multiple applies to earnings, not revenue. If your profit margin is 40%, your earnings are $200K and 2.8x earnings = $560K, not $1.4M.
Fix: Always clarify whether a multiple is based on revenue or earnings.
Mistake 3: What Happens When You Ignore Retention in Valuation?
The mistake: "My revenue is high, so my agency is worth top-dollar."
Reality: If your retention is 70%, you're not selling a business, you're selling a leaky bucket.
Fix: Track and improve retention before you list.
Mistake 4: Why Does Overvaluing "Sweat Equity" Sink Deals?
The mistake: "I built this agency from scratch, so it's worth more."
Reality: Buyers don't pay for effort. They pay for cash flow, retention and transferability.
Fix: Price based on market comps, not emotional attachment.
What Should an Owner Take Away From the 2026 Multiples Data?
Revenue multiples are a useful shorthand for agency valuations, but they're just a starting point. The real value of your agency depends on:
- Retention (the #1 driver)
- Book composition (commercial > personal)
- Systems (documented > owner-dependent)
- Growth (stable or growing > declining)
- Deal structure (carryback > all-cash)
If you're selling, use these multiples to set a realistic asking price, then offer carryback financing to justify a premium.
If you're buying, use these multiples to make data-driven offers and walk away if the seller's expectations are disconnected from reality.
And if you're just curious what your agency is worth, use our free valuation calculator to get an instant estimate based on current market data.
Remember: Valuation is just the starting point. The real money is made in the deal structure. A lower purchase price with favorable carryback terms can be a far better deal than a higher price with brutal bank financing.
Frequently Asked Questions
Q: Do agencies really sell for 8-12x EBITDA?
A: Yes, but only platform-quality agencies with strong margins, growth and $2M+ EBITDA. Smaller agencies typically transact at 1.8x-3.7x SDE (owner earnings) or 1.1x-2.2x revenue. 12.5x-14.5x is reserved for agencies exceeding $5M EBITDA.
Q: What multiple should I use, revenue or EBITDA?
A: Captive books and smaller owner-operated agencies are typically quoted on revenue multiples; mid-market independent agencies use EBITDA. See revenue multiple vs EBITDA multiple for when each applies.
Q: Is 2x revenue a fair price for my book?
A: 2x sits near the top of the market range. To defend it you'll need 90%+ retention, a commercial-heavy or specialty book, transferable appointments and clean financials. Without those, expect offers closer to 1.1x-1.5x revenue.
Q: Why did my agency come in lower than I expected?
A: Usually one of: weak retention, heavy personal-lines concentration, owner dependency, undocumented systems or personal expenses run through the P&L that suppress EBITDA. See agency valuation mistakes for the most common causes.
Q: Do buyers use SDE or EBITDA for small agencies?
A: Sub-$1M revenue owner-operated agencies are typically valued on SDE (owner's discretionary earnings) which adds owner compensation back. Mid-market and PE deals use EBITDA with normalized owner comp, the distinction matters because the same agency can have very different headline multiples under each method.
Sources & References
- Peak Business Valuation: Insurance Agency Multiples
- ExitWise: Insurance Agency Valuation Rule of Thumb
- MarshBerry: 2024 Year-End M&A Report
- Deloitte: 2025 Insurance M&A Outlook
- Risk & Insurance: M&A Values Surge
- Sica Fletcher: Valuation Rule of Thumb
Calculate your agency value now or browse active listings to see what agencies in your market are selling for.