Insurance Brokerage Business Valuation
Who this is for
Independent P&C, benefits, or life insurance brokers considering a sale to a consolidator, PE-backed platforms evaluating bolt-on acquisitions, and principals planning partnership buyouts.
What drives value in Insurance Brokerage
- Net commission and fee revenue retention year over year
- Commercial lines mix versus personal lines (commercial commands premium)
- Specialty or niche expertise (E&O, marine, construction, healthcare)
- Client age profile and concentration in top 10 accounts
- Producer perpetuation and non-compete agreements
- Carrier relationships and contingency/bonus income
Valuation methods we use
Insurance brokerages are typically valued at 7–12× EBITDA or 1.5–3× annual commission revenue, adjusted for retention, growth rate, and line of business mix. Consolidators frequently apply revenue-based multiples for speed of execution. This tool is informational only. Output is driven by your inputs and does not constitute a formal appraisal or certified valuation.
Typical metrics and inputs
Net revenue retention
Annual commission revenue retained excluding new business; >90% is strong.
Commercial lines %
Share of revenue from commercial P&C; commercial books trade at premium to personal lines.
EBITDA margin
Pre-add-back EBITDA as a percentage of net revenue; 20–35% is typical for mid-sized brokers.
Top 10 client concentration
Revenue share of the largest 10 clients; >40% elevates risk and may discount the multiple.
Contingency income
Carrier profit-sharing payments; adds to value but is treated as non-recurring by conservative buyers.
Example scenarios
Commercial P&C specialist
A commercial P&C brokerage with $1.5 M net revenue, 93% retention, and a specialty in construction risk might trade at 2.2–2.8× revenue.
Benefits-focused mid-market broker
An employee benefits broker with $3 M in revenue, recurring payroll integration fees, and 85% retention might be valued at 8–10× EBITDA.
Frequently asked questions
What is a typical insurance brokerage multiple?
Revenue multiples of 1.5–3× are common; EBITDA multiples of 7–12× are standard. Specialty brokers or high-growth platforms can exceed these ranges.
Does book of business quality matter more than size?
Yes — retention, commercial mix, and long-standing carrier relationships often matter more than raw revenue volume.
How do PE consolidators value brokerages?
PE platforms focus heavily on retention, producer perpetuation, and whether the book is concentrated in one producer whose departure would impair value.
Does contingency income count in valuation?
Contingency income is often given partial credit (50–75%) since it is not contractually guaranteed year to year.
Is this a certified appraisal?
No. This tool provides informational estimates only. For formal transactions, work with an insurance M&A advisor.
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