Updated September 16, 2026
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Most owners are surprised to learn their agency trades richer than businesses with far more revenue. The explanation is durability. Renewal commissions arrive every year with remarkably little effort compared to winning the account in the first place, and an agency that retains the large majority of its book has revenue a buyer can forecast three years out with confidence. That predictability supports leverage — buyers can borrow against it — and a decade of consolidation by private-equity-backed brokerages has kept a deep pool of well-funded buyers competing for quality books. High certainty plus intense demand is the whole story of the sector’s multiples.
| Agency profile | Typical range (× adjusted EBITDA) |
|---|---|
| Smaller agencies | 6–9× |
| Larger, established books | 8–12× |
| Commercial-lines-weighted books | Top of range |
Industry rule-of-thumb ranges — the same ranges used in our free valuation calculator and our EBITDA multiples by industry guide — not an appraisal of your agency.
The denominator is adjusted EBITDA — earnings with owner-specific costs added back, calculated the way buyers will calculate it in diligence. If that number is unfamiliar territory, start with our owner’s guide to adjusted EBITDA and add-backs; in a sector priced at eight to twelve turns, every defensible dollar of add-back is worth eight to twelve dollars of price.
If a buyer could see only one number, they would ask for retention. It compresses everything they care about into a single figure: how sticky the client relationships are, how competitive the placements are, how well the service team performs, and how likely the revenue is to still exist in year three. An agency retaining 92 percent of accounts is a fundamentally different asset from one retaining 80 percent, even at identical revenue — the second book must replace a fifth of itself every year just to stand still. Buyers read retention by line, by account size, and by producer, and they pay a visible premium for books where the number is high, stable, and documented. If you plan to sell in two or three years, nothing you do will move the price more than protecting and proving retention now.
Commercial books price above personal-lines books for structural reasons: accounts are larger, relationships are institutional rather than individual, switching costs are higher, and revenue per account supports real service margins. Personal-lines books still transact well — especially dense, low-churn books in stable markets — but the top of the sector’s range belongs to commercial. Beyond mix, buyers read the shape of the book: account concentration (no client so large that losing it moves the agency), carrier concentration and the dependence on contingent commissions, niche depth (a specialty book with real expertise defends itself), and the average age of key relationships — a book whose largest accounts are all tied to one retiring producer is discounted for exactly that reason.
Many agency owners carry a long-standing intention to perpetuate internally — to a family member, a producer, or a management team. It is a legitimate path, and it is also, economically, a very different one: internal buyers rarely have capital, so the price is typically lower and paid over years out of the agency’s own cash flow, with the seller carrying the risk the whole way. An external sale typically delivers a materially higher price, mostly in cash at close, from a buyer bringing outside capital. Neither answer is universally right; what is universally right is comparing them honestly — after tax, across time, with risk counted — before committing to either. We work through that comparison in Should I sell my insurance agency or perpetuate?
Because agencies price at eight to twelve turns, preparation pays more per hour here than in almost any other sector. Start with the retention exhibit: pull renewal data by line, by account size, and by producer for the last three years, reconciled to carrier statements — an agency that can hand over that exhibit on day one changes the tone of the entire process. Close the producer-agreement gaps next, quietly and as ordinary housekeeping, well before any sale discussion. Begin transitioning your personal accounts to the service team and to younger producers so the book demonstrably renews with the agency rather than with you. And normalize the financials: commission revenue tied to carrier statements, contingents separated from base commissions, personal costs out. Twelve months of this work routinely moves an agency a full turn inside its range — which, at these multiples, is the most valuable year of work most owners will ever do.
In a relationship business, discretion is not a preference — it is asset protection. Producers who hear the agency is for sale start listening to recruiters; carriers ask questions; large clients get nervous at renewal. A properly run process is built so none of that happens: buyers are qualified and sign NDAs before they learn the agency’s name; nothing is listed, advertised, or published anywhere; producer-level and client-level detail is released late, in stages, under tighter terms; and your team hears the news from you, when you decide. Even the first step is private by design — a valuation conversation with us is free, creates no obligation, and is shared with no one.
As an industry rule of thumb, smaller agencies trade around 6x to 9x adjusted EBITDA and larger, established books around 8x to 12x, with commercial-lines books at the higher end. Retention rate is the closest single proxy for where an agency lands, because it measures the durability of the revenue a buyer is purchasing. A confidential read gives you a written range based on your actual book.
Because renewal commissions are among the most predictable revenue streams in the lower middle market. A book that retains 90 percent or more of its accounts each year behaves almost like contracted recurring revenue, buyers can borrow against that predictability, and a decade of consolidator demand has kept competition for quality books intense.
They are different economics, not just different buyers. Internal perpetuation usually means a lower price paid over years out of the agency’s own cash flow, in exchange for legacy and continuity. An external sale usually means a materially higher price, paid mostly at close, from a buyer using outside capital. Comparing them honestly — after tax, across time, with risk included — is worth doing before choosing either.
Retention by line and by account size, carrier concentration and contingent-commission dependence, producer agreements and non-solicitation coverage, the age and transferability of key client relationships, and how much of the book the owner personally controls. Clean answers shorten diligence; surprises come out of the price.