Why Private Equity Is Paying Record Prices for Insurance Agencies

Editorial cartoon of a large industrial vacuum tube descending from a cloudbank labeled PE. The tube is mid-suction, lifting a small two-story agency building off the street, the building tilted at an angle inside the tube's mouth. Below the tube, three or four similar agency buildings still stand on the street. The tube is angled slightly suggesting it will swing toward another. — Air freshener.

If you own an independent insurance agency and you haven't gotten a cold call from a PE-backed acquirer in the last six months, you probably have a disconnected phone. Private equity money is flooding into insurance distribution, and it's reshaping what agencies are worth and who's buying them.

The Numbers Tell the Story

In 2024, there were 633 announced M&A transactions in insurance distribution. That's up 2.5 percent from the prior year and continues a decade-long trend of increasing deal activity. Of those 633 deals, PE-backed buyers accounted for 73.5 percent. Nearly three out of every four agency acquisitions involved private equity money. OPTIS Partners' full-year 2024 count reached 750 announced transactions, with BroadStreet Partners leading all buyers at 90 completed deals. The 633 figure represents MarshBerry's count through November.

Nine out of ten insurance companies surveyed expect M&A activity to increase further. (Deloitte's insurance M&A outlook similarly projects continued deal volume growth driven by PE platforms seeking scale.)

Why PE Loves Insurance

Insurance distribution has characteristics that private equity investors dream about: recurring revenue from renewals, high client retention, predictable cash flows, and fragmented ownership that creates roll-up opportunities. The industry is also structurally resistant to disruption — despite what the insurtech hype says, complex risk still requires a human advisor.

The PE playbook is straightforward: acquire a platform agency, bolt on smaller agencies at lower multiples, improve margins through operational efficiency and scale, then sell the combined platform at a higher multiple. Buy at 6x, improve, sell at 10x. The math works, and the capital keeps coming. (Sica Fletcher documents that well-run independent agencies regularly trade at 6–10x EBITDA, with platform-quality assets commanding the top of that range.)

What This Means If You're Selling

If you're considering selling your agency in the next three to five years, the PE-driven market is working in your favor. More buyers competing for deals means higher prices. Sophisticated buyers also mean more creative deal structures — not just cash at close, but earnouts, equity rollovers, and management agreements that can increase total value beyond the initial offer.

But PE buyers are also sophisticated evaluators. They're not just looking at your revenue. They're stress-testing your retention, modeling your growth trajectory, evaluating your technology stack, and assessing whether your business can operate without you. The agencies that command top-of-market multiples from PE are the ones that look like businesses, not jobs. See what buyers actually look for to understand the evaluation framework.

What This Means If You're Buying

If you're looking to acquire an agency, the PE-driven market means you're competing against deep-pocketed buyers for quality assets. The days of finding a great agency at 4x EBITDA are mostly over. Expect to pay 6 to 8 times EBITDA for a good independent agency and more for one with strong growth and commercial lines.

The opportunity for individual buyers is in the deals PE doesn't want — smaller agencies that fall below the revenue threshold most PE platforms target, agencies in rural markets, and agencies where the owner is ready to exit quickly. These transactions still happen at reasonable multiples, but you need to find them before the PE scouts do. For decision framework on which buyer type fits your situation, see selling to PE vs independent buyer.

What This Means If You're a Captive Agent

PE firms overwhelmingly target independent agencies. The record transaction volumes and premium multiples documented by OPTIS Partners and MarshBerry are concentrated in the independent channel. The record prices, the 51 percent increase in median sale value, the bidding wars — none of that applies to a captive book of business restricted to a single carrier.

While independent agency owners are fielding unsolicited offers at premium prices, captive agents are negotiating with their carrier over revenue multiples that have remained structurally lower than EBITDA-based independent valuations. (MarshBerry and Peak Business Valuation both confirm that independent agencies consistently achieve significantly higher multiples than captive books on the open market.) The gulf between what the market will pay for an independent agency and what a carrier will pay for a captive book has never been wider.

The structural difference between what PE will pay for independent agencies and how captive books are valued represents a significant gap that agents weigh when evaluating their long-term business model. Any transition involves contract restrictions, non-competes, and financial trade-offs that require professional guidance.

"The pace of deal activity in 2024 was remarkable — 750 announced transactions is a record, and BroadStreet alone completed 90 deals. The appetite from PE-backed platforms hasn't slowed, and we expect 2025 to remain extremely active." — Steve Germundson, OPTIS Partners (Insurance Journal)

Frequently Asked Questions

Q: Should I sell to PE or an individual buyer?

A: PE headline prices are typically higher (8x+ EBITDA vs. 6x for independents), but a meaningful slice of consideration is often tied to earnouts over 2-3 years, plus a 1-3 year post-close commitment. Independent buyers pay less upfront but offer simpler terms and shorter transitions. See selling to PE vs independent buyer.

Q: What's the difference between PE and strategic buyer offers?

A: PE offers higher multiples with earnouts, equity rollover, and longer retention. Strategic (carrier or big-broker) buyers typically offer market-rate multiples with strong cultural fit. Independent buyers offer cleaner deal terms but lower headline prices. Compare net-to-seller after risk, not just headline numbers.

Q: Do agencies really sell for 8-12x EBITDA?

A: To PE platforms, yes — but only for quality independent agencies with strong margins and growth. 6x-8x EBITDA is typical for mid-market, 8x-12x for platform-quality assets, and 12.5x-14.5x for $5M+ EBITDA platforms.

Q: How do I find qualified buyers?

A: Most major PE-backed platforms (BroadStreet, Hub, Acrisure, AssuredPartners, Risk Strategies) publish acquisition criteria and accept direct seller inquiries. A qualified M&A advisor can run a competitive process — typically producing 8-10 bids — though fees run 5-10% of transaction value.

Q: Can individual buyers still find good agencies to acquire?

A: Yes, but typically the deals PE doesn't want: sub-threshold revenue, rural markets, quick-exit sellers, and smaller personal lines books. These still transact at reasonable multiples. See our buying a P&C insurance agency guide for the buyer playbook.

Sources & References

OPTIS Partners — Full-Year 2024 M&A Transaction Count: https://www.insurancejournal.com/news/national/2025/01/23/809288.htm
MarshBerry — PE-Backed Buyers at 73.5% of Deals: https://www.marshberry.com/resource/insurance-brokerage-ma-activity-looks-to-close-out-2024-on-a-strong-note/
MarshBerry — Agency Valuation Framework: https://www.marshberry.com/resource/how-to-think-about-value/
Deloitte — Insurance M&A Outlook: https://www.deloitte.com/us/en/Industries/financial-services/articles/insurance-m-and-a-outlook.html
Sica Fletcher — EBITDA Multiples for Insurance Agencies: https://www.sicafletcher.com/post/insurance-agency-valuation-rule-of-thumb-scf
Peak Business Valuation — Insurance Agency Multiples: https://peakbusinessvaluation.com/valuation-multiples-for-an-insurance-agency/
Risk & Insurance — M&A Values in 2024: https://riskandinsurance.com/insurance-ma-values-surge-despite-fewer-deals-in-2024/