How Insurance Agencies Are Actually Valued in 2026
Revenue multiples, EBITDA multiples, and why the method matters more than the number.
If you ask five people what your insurance agency is worth, you'll get five different answers. And at least three of them will be wrong — not because the people are incompetent, but because they're using the wrong yardstick.
Insurance agency valuation in 2026 comes down to two fundamentally different approaches, and which one applies to you depends entirely on what kind of agency you built.
Revenue Multiples: The Captive Default
Revenue multiples are simple. Take your annual revenue, multiply by some number between 1.5 and 3, and that's your book value. This is how most captive books get valued, and it's the method your carrier will use when you try to sell.
The problem with revenue multiples is that they tell you absolutely nothing about the health of the business. An agency doing $500,000 in revenue with a 5 percent margin and an agency doing $500,000 with a 30 percent margin are worth the same under this method. That should bother you.
Revenue multiples exist because captive books are simpler assets. You're selling a list of clients tied to one carrier. The buyer knows exactly what they're getting — and exactly what the carrier will allow them to do with it. The constraints that make captive books easier to value are the same constraints that make them worth less.
EBITDA Multiples: The Independent Standard
EBITDA — earnings before interest, taxes, depreciation, and amortization — is how serious acquirers value independent agencies. It measures what the business actually produces in cash flow, normalized for financing and accounting decisions that vary by owner.
In the current market, EBITDA multiples for independent agencies range from 4 to 9 times for average agencies, 6 to 8 times for quality operations, and 7.5 to 12 times when strategic acquirers or PE firms are competing for the deal. The spread is enormous because the multiple reflects risk and growth potential, not just current revenue.
A well-run independent agency with 25 percent EBITDA margins, strong organic growth, and diversified carrier relationships might command 8 to 10 times EBITDA. The same revenue in a single-carrier captive book might fetch 2 times revenue — which often works out to less than half the independent agency's sale price.
SDE Multiples: The Small Agency Method
Seller's discretionary earnings — SDE — is EBITDA plus owner compensation. It's typically used for smaller agencies where the owner is the primary producer. SDE multiples in the current market run 3.29 to 4.12 times, which is helpful for agencies under $1 million in revenue where EBITDA normalization gets messy.
If you're a solo agent doing $400,000 in revenue and paying yourself $150,000, your SDE might be $200,000. At 3.5 times, your agency is worth about $700,000. Not a bad retirement asset — but compare that to the independent agency down the street doing the same revenue at a 25 percent EBITDA margin, selling at 8 times. Their number is $800,000 using a completely different calculation that values the business as a business, not as a job.
The Market Is Hot — And Getting Hotter
There were 633 announced M&A transactions in insurance distribution in 2024, up 2.5 percent from 2023. PE-backed buyers accounted for 73.5 percent of those deals. The median sale price hit $650,000 in 2025, up 51 percent from the prior year.
These numbers tell a clear story: buyers are aggressive, capital is plentiful, and agencies with strong fundamentals are commanding premium prices. But "strong fundamentals" means something specific — organic growth, high retention, clean financials, and a business that doesn't collapse when the owner takes a two-week vacation.
Which Method Applies to You?
If you're a captive agent with a book of business, you'll be valued on revenue multiples. That's the ceiling, and it's a low one.
If you're an independent agency owner, you'll be valued on EBITDA or SDE multiples. Your ceiling is dramatically higher, but it depends on how you've built the business.
The agents who understand this distinction before they start building are the ones who end up with a retirement asset worth building. The ones who figure it out twenty years in are the ones who wish they'd made a different choice.
The valuation method isn't just an accounting exercise. It's a verdict on what kind of business you built.