If you ask 10 agency owners what their shop is worth, you usually hear some version of:
“Agencies like mine are getting 8–10x.”
There is some truth in that, but it is only the tip of the iceberg. Recent deal data shows well-run brokerages can trade at double-digit EBITDA multiples. A 2024 year-end report from MarshBerry puts average upfront valuations for insurance brokerages at 11.22x EBITDA in 2024, with platform firms near 14x on base purchase price.
On the other end, smaller independent agencies show much tighter bands: sub-$500k revenue agencies around 6.8x EBITDA, $500k–$1M around 7.5x–7.6x, and $2M–$5M “platform” agencies around 8.2x.
Both can be true. Big, platform-quality brokers live in a different zip code than a $1.5M-revenue Main Street shop.
From a buyer’s perspective, here is how your value really gets built.
1. Buyers Underwrite Your Cash Flow, Not Your Top Line
Revenue multiples are not definite math. Serious buyers care about sustainable free cash flow, which means adjusted EBITDA.
They start by rebuilding your P&L to answer one question:
“If we owned this, ran comp at market, and plugged it into our platform, how much cash would actually be left?”
So they will:
- Normalize owner comp (no more “salary plus mystery distributions”).
- Add back true one-offs and clearly non-business expenses.
- Strip out lifestyle perks running through the agency.
- Adjust for underpaid or overpaid producers versus the market.
Two agencies can both show $2M of commission and fee revenue. The one consistently generating a 28% EBITDA margin is in a completely different conversation than the one at 12%.
If you want a better valuation, you start by improving real EBITDA, not just top-line.
2. Then They Score How Fragile That Cash Flow Is
Once the earnings quality check is done, buyers move to risk. The question becomes:
“How likely is this cash flow to break once the ink is dry?”
That is where a lot of multiple spread comes from.
Size and diversification
- Revenue scale. Bigger shops get better multiples because fixed costs are leveraged, there is usually a bench, and the business is less dependent on one person.
- Client concentration. If one or two accounts make up a large share of revenue, expect a discount or more of the price tied up in earnouts.
Agencies above $5M in revenue average 9.5x EBITDA, versus 6.8x–7.8x for sub-$2M shops. Scale and diversification pay.
Line mix and niches
- A balanced personal/commercial P&C mix with clear niche strengths is more attractive than “we write anything with a pulse.”
- Overexposure to beat-up classes (certain trucking, tough habitational, distressed coastal property) will drag value unless the performance story is outstanding.
MarshBerry notes that top “platform” firms still command flat, elevated multiples around 14x EBITDA even as public broker valuations jump around, largely because they are built on defensible niches and diversified books.
Carrier mix and contracts
Carrier concentration is its own risk category.
Agencies with healthier EBITDA margins and better valuations tend to have balanced carrier mixes rather than placing the majority of their premium with one market.
If 60% of your premium sits with one carrier, a buyer has to underwrite:
- Appetite risk (carrier changes its view on your core business).
- Compensation risk (contingent and overrides swinging hard).
- Relationship risk (is this tied to you personally or to the agency?).
That risk shows up as a lower multiple or as more of your deal price pushed into at-risk structure.
Producer bench and perpetuation
Buyers look hard at who actually controls the relationships:
- Is there a real producer bench or just you and one other owner doing all the selling?
- What is the age and runway of the revenue producers?
- Do you have enforceable non-competes and non-solicits?
Valuation analysts and M&A advisors routinely point out that younger ownership benches with documented perpetuation plans tend to earn higher multiples, because the buyer is not buying a retirement party.
Operations and data
This is where a lot of agencies quietly lose 1–2x:
- Sloppy financials and trust accounting.
- No usable AMS reports on retention, remarketing, or producer performance.
- “Tribal knowledge” workflows instead of documented processes.
Operations don’t need to be perfect. But a buyer always prefers a process map over a black box.
3. They Translate That Into A Multiple Band
Only after the cash flow and risk work do buyers really talk multiples. They are triangulating three things:
- Market benchmarks.
MarshBerry shows average upfront valuations for all brokerage firms at 11.22x EBITDA in 2024 and platform firms around 14.02x. - Where do you sit on the quality curve?
A 2025 study from Statista on insurance company EBITDA multiples shows the same pattern: smaller, riskier companies living in the mid-single-digit multiples, with better capitalized, more profitable businesses pushing into the 8x–10x range and above. - Their return requirements.
PE-backed buyers and large strategics work backwards from required IRR and payback. That drives how much they can pay upfront versus what needs to sit in earnouts or equity.
That is why you might hear a peer brag about a “10x+ deal” while your first serious indication of interest lands at 6.5x. You may not be playing in the same size, risk, or quality pool.
4. Deal Structure: The Multiple Is Not All Cash
Even when you are in the “good” band, the headline multiple is not wired to you on day one. Most agency deals stack value in three layers:
- Base purchase price. Cash and notes at closing.
- Earnout. Additional payments tied to future revenue or EBITDA over 2–5 years.
- Equity roll. In larger platform deals, sellers roll part of the price into equity in the buyer’s entity.
MarshBerry notes that while upfront base purchase price averages 11.22x, maximum potential earnouts pushed total possible consideration over 15x EBITDA for firms that hit their post-close targets.
From a buyer’s chair, this is not just negotiation. It is risk management:
- Cleaner, more durable agencies get more cash up front.
- Choppier books, heavy concentrations, or thin benches push more of the “headline multiple” into earnouts and equity.
When you look at your own potential exit, you should be asking: “What portion of this number is guaranteed, and what portion is a bet I am making on my own future performance under someone else’s flag?”
5. What To Fix 2–5 Years Before You Sell
You cannot control rates, tax law, or interest costs. You can control how your agency looks when a buyer underwrites it.
If a sale is even a possibility in the next few years, here is what moves the needle most:
- Boost real EBITDA, not just revenue.
Tighten non-essential spend, clean up unprofitable accounts, and get honest about producer productivity. Margin is a huge part of your story. - Balance your carrier and client mix.
Use your AMS to spot carrier and client concentration. Aim to keep any single carrier or client from dominating your revenue. That alone can move you 1x in either direction. - Build a real bench.
Develop younger producers and operational leaders with clear roles, comp plans, and retention hooks. Buyers pay up when they see a business that does not fall apart if you step back. - Document the machine.
Get your core workflows, renewal timelines, and service standards out of people’s heads and into playbooks. It makes integration easier and proves there is a process, not just heroics. - Track the metrics buyers care about.
Live with numbers like organic growth, retention, EBITDA margin, revenue per employee, new business as a % of revenue, and remarketing outcomes. If you cannot show it, you will not get full credit for it.
The Bottom Line
From a buyer’s view, your agency is not “worth 8–10x.”
It is a set of cash flows and risks that put you somewhere on a curve: maybe 6–7x, maybe 8–10x, maybe higher if you truly look and feel like a scalable platform.
If you want to change that outcome, focus less on the folklore multiple and more on the levers that buyers actually price: EBITDA, risk, people, and process. Build the kind of agency you would be excited to buy yourself. The valuation tends to follow.
