The short answer: independent insurance agencies trade at 1.57 to 2.41× revenue, 3.18 to 4.33× SDE, or 4.28 to 5.24× EBITDA (appraiser average ranges, with the revenue multiple the most-used yardstick). The asset is the book of business: renewal commissions that recur every policy year. Price follows retention, and retention is what your diligence has to prove. In dollars: from about $470,000 for a small $300,000-revenue book to $2.9M for a $1.2M-revenue agency, with the classic mid-size purchase at $942,000 to $1.45M.
Why buyers pay revenue multiples for agencies
Most Main Street businesses have to re-earn every dollar each year; an agency's renewal commissions arrive on schedule as long as clients stay. That built-in recurrence is why agencies are one of the few small-business categories priced on revenue, and why lenders like them: the income is contractual, documented by carriers, and verifiable line by line. The flip side is that the asset can walk. Clients follow producers, producers follow non-competes (or their absence), and carrier appointments do not always transfer, so an agency's durability is a set of contracts you must actually read.
The second thing recurrence buys you is financeability. A lender underwriting a landscaping company is betting next season happens; a lender underwriting an agency can read three years of carrier commission statements and watch the same policies renew line by line. That documentation quality is why agencies close with bank debt at price points where other service businesses need heavy seller financing, and why sellers of good books rarely wait long for a buyer.
What insurance agencies sell for
| Method | Typical figure | Notes |
|---|---|---|
| Revenue multiple | 1.57–2.41× | The most-used yardstick for agencies |
| SDE multiple | 3.18–4.33× | Above the small-business norm, the recurrence premium |
| EBITDA multiple | 4.28–5.24× | How larger and platform buyers price |
Where an agency lands inside those ranges follows the quality of the book: retention rate, the mix of commercial versus personal lines, how concentrated revenue is in a few accounts or one carrier, and whether producers stay. An agency with a 90%+ retention book of small commercial accounts is a different asset from one dependent on a single carrier's personal lines, at the same revenue. Cross-check the general method in our valuation guide.
A worked example makes the spread concrete. An agency with $600,000 of annual commission revenue prices at $942,000 to $1.45M on the revenue multiple (1.57–2.41×). If that same agency throws off $250,000 of SDE, the earnings method (3.18–4.33×) says $795,000 to $1.08M. The gap between those two answers is the negotiation: a seller with a 92% retention book argues from the revenue method's top, a buyer looking at 78% retention argues from the SDE method's bottom, and the retention reports decide who is right.
| Business size | Implied price range | Note |
|---|---|---|
| Small book, $300,000 revenue | $471,000–$723,000 | A first acquisition or a producer buyout |
| Mid-size, $600,000 revenue | $942,000–$1.45M | The classic independent-agency purchase |
| Larger, $1.2M revenue | $1.88M–$2.89M | Platform territory; EBITDA pricing takes over |
Illustrative sizes priced with the sourced revenue-multiple range; a specific agency lands inside its band on the factors below.
And what decides where inside the band a specific agency trades:
| Pushes the price up | Pulls it down |
|---|---|
| Retention at 90%+ with clean renewal reports | Single-carrier or single-account dependence |
| Commercial-lines weight in the book | An aging, shrinking personal-lines book |
| Diversified carriers and product lines | Client relationships held personally by the seller |
| Producers under enforceable non-solicits | Contingent income treated as if it were renewal income |
| Commission data that reconciles to carrier statements | Books that only the seller can explain |
The diligence that makes or breaks an agency deal
| What to verify | The question it answers | Where it shows up |
|---|---|---|
| Retention rate by year | Does the book actually renew? | Management-system renewal reports vs carrier statements |
| Carrier appointments | Do the contracts that produce the commissions transfer to you? | Each carrier agreement's assignment terms |
| Producer agreements | Can the people who own the client relationships walk with them? | Employment and non-solicit contracts |
| Account and carrier concentration | How much income hangs on one client or one carrier? | Commission ledgers by account and carrier |
| Commission vs fee vs contingent income | How much of the revenue is the durable kind? | Carrier statements; contingents are the volatile layer |
The number that decides agency deals
Retention. A book renewing at 90%+ compounds; a book renewing at 75% is a leaking bucket you are paying a premium multiple for. Ask for renewal reports by year and reconcile them against carrier commission statements, not the seller's summary.
Licensing: the agency needs licensed people, not necessarily a licensed owner
Insurance is state-licensed at both the individual and agency level, and the rules vary by state and by line. In practice the business must have properly licensed producers and a licensed designated principal; whether you personally hold a license or hire it in is a structural choice to confirm with the state's insurance department before the LOI. Selling is regulated; owning, in most states, is a compliance question your attorney resolves in the normal closing flow, per what an M&A attorney does.
How a typical agency purchase is financed
Agencies are strong SBA candidates because the renewal income is documented and durable. Illustrative structure on a mid-range deal:
| Source | Amount | % of price |
|---|---|---|
| SBA 7(a) loan | $810,000 | 90% |
| Equity injection (total) | $90,000 | 10% |
| of which: standby seller note can cover | up to $45,000 | up to 5% |
| of which: your cash portion | as low as ~$45,000 | ~5% |
The stack logic, standby notes included, is in the acquisition financing guide; test a specific deal in the SBA calculator.
Run an agency deal through the calculator
Where to find insurance agencies for sale
| Channel | What you find there | How to work it |
|---|---|---|
| Marketplaces | Smaller independent agencies | Alerts on; see the marketplace comparison |
| Agency-specialist intermediaries | The better books, often before any listing | Brief them on lines, size, and geography |
| Direct outreach | Retiring principals; carrier reps often know who is selling | The off-market playbook |
One sourcing note specific to this vertical: carrier field representatives visit every agency in their territory and usually know which principals are two years from retiring. A buyer who tells three carrier reps what they are looking for has built an off-market pipeline no listing site can match, and it costs nothing but the conversations.
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Frequently asked questions
Appraiser average ranges put agencies at 1.57 to 2.41 times revenue, 3.18 to 4.33 times SDE, or 4.28 to 5.24 times EBITDA, with the revenue multiple the most-used yardstick. Where a specific agency lands depends on retention, line mix, and concentration.
Because the revenue itself recurs: renewal commissions arrive every policy year as long as clients stay, documented by carrier statements. That contractual recurrence makes revenue an unusually reliable base, which is rare among small businesses.
That the book walks. Clients follow producers, producers leave without enforceable non-solicits, and carrier appointments do not always transfer. Diligence lives in the renewal reports, producer contracts, and each carrier agreement's assignment terms.
The agency needs properly licensed producers and a licensed designated principal; whether the owner personally holds a license varies by state and structure. Confirm the state insurance department's rules before the LOI.
Yes, agencies are strong SBA candidates because renewal income is documented and durable. The standard structure is a 10% equity injection, about $90,000 on a $900,000 agency, with up to half available as a standby seller note.
Sources
Valuation multiples: Peak Business Valuation, Valuing an Insurance Agency (average ranges published by a business appraiser, educational figures, not an appraisal of any specific agency). Licensing varies by state; verify with the state insurance department. SBA mechanics: our equity injection guide.
