Get a ballpark value for your insurance agency from its revenue and margin, using published EBITDA multiples. See how your margin compares with the industry and what each extra dollar of profit is worth.
EBITDA = Revenue × EBITDA margin
Value = EBITDA × multiple (7x to 11x)
Quality score (0 to 100), 25 points each [benchmark estimate]:
- Organic growth of 5% or more
- Client retention of 90% or more
- Largest producer under 30% of revenue
- EBITDA margin of 25% or moreThe multiple range comes from Sica Fletcher, which reports that agencies have on average sold for 8x to 12x EBITDA in recent years and suggests 7x to 11x for a conservative estimate. Your quality score sets where in that range you land. The score thresholds are our estimate of what buyers reward, not a published standard.
| Group | EBITDA margin |
|---|---|
| Industry average | 15% to 20% |
| Top independent firms | 25% to 30%+ |
Source: MarshBerry, How to Calculate Your Insurance Firm's Value. MarshBerry also notes that firms trade at EBITDA multiples from the mid-single digits to the mid-teens, with larger, faster-growing and steadily profitable firms at the top.
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This calculator gives an estimate for planning. It is not a formal valuation or financial advice.
Most agencies are valued as a multiple of EBITDA, which is earnings before interest, taxes, depreciation and amortization. Sica Fletcher reports that agencies have on average sold for 8x to 12x EBITDA in recent years, and suggests using 7x to 11x for a conservative estimate. Smaller agencies are sometimes quoted as a multiple of commission revenue instead.
MarshBerry estimates average EBITDA margins in the industry at 15% to 20%, with top independent firms reaching 25% to 30% or more. Margin matters twice: it sets your EBITDA, and strong margins tend to earn a higher multiple.
Size, growth and steady profit. MarshBerry notes that firms with higher than average multiples tend to be larger, growing faster and consistently profitable. Strong client retention and a book that is not dependent on 1 producer also help.
At a 7x multiple, every extra $1 of EBITDA adds $7 of value, the example MarshBerry uses. That is why small margin improvements and steady organic growth move an agency's value so much.
No. It gives a ballpark range from published rules of thumb. A sale or perpetuation plan needs a formal valuation that reviews your financials, carrier contracts, book mix and producer agreements.
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