Insurance Agencies
Agency Multiple
The valuation multiple — usually expressed as a multiple of EBITDA — used to price the sale of an insurance agency.
Definition
Multiples reflect the quality of the book, the durability of revenue, the growth trajectory, and the buyer pool. Two agencies with identical EBITDA can transact at very different multiples based on customer concentration, producer continuity, and the mix of personal vs. commercial vs. specialty lines.
When It Matters
Buying, selling, or recapitalizing an agency.
Common Questions
What drives a higher agency multiple?
Commercial lines concentration, organic growth, low customer concentration, and a stable producer team. Personal-lines-heavy or growth-flat agencies tend to fetch lower multiples.
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Related Terms
Insurance Agencies
Earnings before interest, taxes, depreciation, and amortization — a common proxy for operating cash generation.
Insurance Agencies
Performance-based bonus compensation paid by a carrier to an independent agency, tied to volume, growth, and loss-ratio metrics.
Insurance Agencies
The long-term plan for transferring agency ownership to the next generation — internal employees, family, or outside buyers.