How Insurance Agencies Are Actually Valued in 2026
Revenue multiples, EBITDA multiples, and why the method matters more than the number.
If you ask five people what your insurance agency is worth, you'll get five different answers. And at least three of them will be wrong — not because the people are incompetent, but because they're using the wrong yardstick.
Insurance agency valuation in 2026 comes down to two fundamentally different approaches, and which one applies to you depends entirely on what kind of agency you built.
Revenue Multiples: The Captive Default
Revenue multiples are simple. Take your annual revenue, multiply by a number in the typical range — Peak Business Valuation documents 1.82x to 2.33x, while ExitWise reports a broader 1.0x to 3.5x depending on agency quality — and that's your book value. This is generally how captive books are valued, and it's the method your carrier will typically use when you try to sell.
The limitation of revenue multiples is that they don't account for profitability differences between agencies. An agency doing $500,000 in revenue with a 5 percent margin and an agency doing $500,000 with a 30 percent margin are worth the same under this method.
Revenue multiples are commonly used for captive books in part because the asset structure is more straightforward. You're selling a list of clients tied to one carrier. The buyer knows exactly what they're getting — and exactly what the carrier will allow them to do with it. The constraints that make captive books easier to value are the same constraints that make them worth less — a dynamic we explore in captive vs independent: which sells more.
According to Peak Business Valuation, insurance agencies transact at an average revenue multiple of 1.82x to 2.33x, while Sica Fletcher — ranked #1 insurance M&A advisor by S&P Global for 2017-2024 — reports EBITDA multiples of 8x-12x for mid-market agencies.
EBITDA Multiples: The Independent Standard
EBITDA — earnings before interest, taxes, depreciation, and amortization — is how serious acquirers value independent agencies. It measures what the business actually produces in cash flow, normalized for financing and accounting decisions that vary by owner.
In the current market, EBITDA multiples for independent agencies range widely. Insurance Journal reports 8x-10x for agencies under $2M EBITDA and 12.5x-14.5x for those exceeding $5M, while Peak Business Valuation documents lower ranges (4x-5x) for smaller operations. Sica Fletcher reports 8x-12x for mid-market agencies. The spread is enormous because the multiple reflects risk and growth potential, not just current revenue.
A well-run independent agency with 25 percent EBITDA margins, strong organic growth, and diversified carrier relationships might command 8 to 10 times EBITDA (per Sica Fletcher). The same revenue in a single-carrier captive book might fetch 2 times revenue (per Peak BV) — which can work out to less than half the independent agency's sale price.
Insurance Journal reports that common EBITDA multiples range from 8x-10x for agencies under $2M EBITDA to 12.5x-14.5x for those exceeding $5M, according to data from Merger & Acquisition Services.
SDE Multiples: The Small Agency Method
Seller's discretionary earnings — SDE — is EBITDA plus owner compensation. It's typically used for smaller agencies where the owner is the primary producer. According to Peak Business Valuation, SDE multiples for insurance agencies run 3.29x to 4.12x, which is helpful for agencies under $1 million in revenue where EBITDA normalization gets complex.
If you're a solo agent doing $400,000 in revenue and paying yourself $150,000, your SDE might be $200,000. At 3.5 times, your agency is worth about $700,000. Not a bad retirement asset — but compare that to the independent agency down the street doing the same revenue at a 25 percent EBITDA margin, selling at 8 times. Their number is $800,000 using a completely different calculation that values the business as a business, not as a job.
The M&A Market in 2024-2025
OPTIS Partners counted 750 announced M&A transactions in insurance distribution in 2024 (full year), while MarshBerry tracked 633 through November. PE-backed buyers accounted for 73.5 percent of MarshBerry's count.
The data suggests active buyer demand and available capital, with agencies demonstrating strong fundamentals commanding premium prices. But "strong fundamentals" means something specific — organic growth, high retention, clean financials, and a business that doesn't collapse when the owner takes a two-week vacation.
MarshBerry, one of the insurance industry's leading M&A advisory firms, confirms that firms demonstrating "high growth and strong, steady profitability" command multiples in the mid-teens — while average performers trade in the mid-single digits.
The 2024 M&A data supports this premium: OPTIS Partners reported that 750 insurance agency M&A transactions closed in 2024, with commercial-focused agencies consistently commanding the highest multiples.
"Failing to drive operational improvement within your firm can cause you to leave a lot of money on the table." — Phil Trem, President, MarshBerry (MarshBerry Valuation Guide)
Which Method Applies to You?
If you're a captive agent with a book of business, you'll typically be valued on revenue multiples. That range is structurally lower than EBITDA-based independent agency valuations.
If you're an independent agency owner, you'll be valued on EBITDA or SDE multiples. Your ceiling is dramatically higher, but it depends on how you've built the business.
Understanding this distinction early gives agents more options when planning their exit. For a deeper comparison of the two methods, see revenue multiple vs EBITDA multiple, and for the factors that push multiples higher, read what drives insurance agency multiples higher.
The valuation method reflects the underlying structure of the business — and understanding which method applies to your agency is the first step in a realistic exit strategy.
Frequently Asked Questions
Q: How much is my insurance agency actually worth?
A: Independent agencies typically transact at 1.8x-2.33x revenue or 6x-10x EBITDA; captive books are usually lower. Your retention, book composition, and whether a buyer values you on EBITDA or revenue will drive the final number more than the headline range.
Q: Who should do my agency valuation?
A: For casual benchmarks, a certified business appraiser or industry-specific advisor (MarshBerry, Sica Fletcher, Peak Business Valuation). For decision-grade numbers pre-sale, hire an insurance-specific M&A advisor — generic business brokers often misprice insurance books.
Q: How long does it take to value an insurance agency?
A: A quick revenue-multiple estimate takes minutes; a full formal valuation with normalized EBITDA, retention analysis, and comp data typically takes 2-4 weeks. Budget 6-12 months of prep before listing if the valuation surfaces issues worth fixing.
Q: Do buyers use SDE or EBITDA for small agencies?
A: Sub-$1M revenue owner-operated agencies are typically valued on SDE (which adds back owner comp). Mid-market and PE deals use EBITDA with normalized owner comp. See revenue multiple vs EBITDA multiple for how each method changes the final number.
Q: Why did my agency come in lower than I expected?
A: Most common causes: weak retention, owner dependency, heavy personal-lines concentration, undocumented systems, or personal expenses run through the P&L. See agency valuation mistakes for the full list and how to fix them before listing.
Sources & References
- Peak Business Valuation — Insurance Agency Valuation Multiples — SDE, EBITDA, and revenue multiple benchmarks
- Sica Fletcher — Insurance Agency Valuation Rule of Thumb — #1 S&P-ranked insurance M&A advisor
- MarshBerry — How to Think About Value — EBITDA margins and valuation scenarios
- Insurance Journal — Insurance M&A 2024 Outlook — EBITDA multiple ranges by agency size
- OPTIS Partners — 2024 Year-End M&A Report — Annual deal counts and buyer analysis