Insurance agencies are one of the most reliably bid categories in the lower middle market: the renewal book is recurring revenue in its purest form, and consolidators know exactly how to price it. The spread between agencies is retention quality, carrier relationships, and how much of the book actually transfers.
Wide-banded starting ranges from the same table our free valuation calculator uses — a broker review narrows them after seeing real financials:
| Segment | Typical range | What moves it |
|---|---|---|
| Insurance agency | 2× – 3.5× SDE | Carrier mix + commission-vs-fee model drive band; renewal book is the core asset. |
Buyers underwrite retention rate, policy mix, and revenue per account before anything else. A book with documented multi-year retention above its peers commands the top of the band; growth from churn-and-replace does not.
Per the same table our calculator uses, carrier mix and the commission-versus-fee model drive the band. Concentration with one carrier — or appointments that won't transfer — moves value the way customer concentration does everywhere else.
If producers own their books contractually — or can walk with the relationships — the buyer is purchasing less than the P&L suggests. Clean producer agreements with enforceable non-solicits, put in place well before a sale, protect the number.
Retention by cohort, loss ratios where contingent commissions matter, and revenue per policy against carrier statements — not the agency management system's summary screen.
Carrier approval of a new owner is its own process with its own timeline, and a lost appointment can strand a chunk of the book. Treat the top carriers like closing conditions.
Employment agreements, book-ownership clauses, and non-solicit enforceability in your state decide how much goodwill actually conveys. This is where insurance deals quietly gain or lose six figures.
Insurance agencies commonly trade around 2–3.5× SDE, with carrier mix, the commission-versus-fee model, and renewal-book retention driving the band — the renewal book is the core asset. The free valuation calculator gives a personalized starting range.
Recurring renewal revenue, low capital intensity, and a fragmented market make agencies a classic consolidation target — private-equity-backed aggregators and regional agencies both compete for quality books. For a seller, that competition is exactly what a managed process is designed to harvest.
ALBEO FL LLC d/b/a Albeo Business Advisors · FL Lic. CQ1075604