THE SHORT ANSWER
Value an insurance agency using supported company earnings, actual carrier/producer/book rights and permanent servicing costs. Separate premiums from commissions and fees, and reconcile returns, contingent payments and renewal cohorts. National reported agency sales provide limited historical context; they do not establish a specific captive, independent or line-of-insurance price, insurer valuation or guaranteed renewal income.
Use reported agency sales within their actual scope
BizBuySell reports national 2021–2025 sold owner-discretionary earnings multiples of 1.88 lower quartile, 2.70 median and 3.44 upper quartile.
(BizBuySell: reported insurance-agency sales)The sample covers small local agencies and includes some agent book-of-business sales. It is not an isolated captive/independent or line-of-insurance sample, insurer/title-company appraisal or managed-platform EBITDA benchmark. These historical sold figures are separate from asking prices and current local pricing recommendations.
SBA describes income, market and asset valuation approaches.
(SBA: closing or selling a business)Seek actual completed evidence matched for carrier rights, business model, earnings definition and offered book/assets. A generic premium-volume multiple or a sector-wide range does not establish this company’s price.
Test commissions, returns and distinct service costs
Reconcile actual carrier statements, fees, returns, credits, accounts and settlement. Keep policy premiums and money held for others outside the defined company-commission group below; actual accounting presentation requires accountant review.
| Hypothetical commission/service group | Assumed amount | Boundary |
|---|---|---|
| Collected company commissions | 20,000 dollars | No policy premiums or client balances |
| Same-group commissions returned | 2,500 dollars | Assumed actual distinct return |
| Distinct producer costs | 8,000 dollars | Not already deducted |
| Distinct service-support costs | 2,000 dollars | Separate stated amount |
| After specified amounts | 20,000 − 2,500 − 8,000 − 2,000 = 7,500 dollars | Before management, premises and other costs |
This leaves 17,500 dollars after the assumed return, then 7,500 dollars after 10,000 dollars of specified producer/support costs. Management, premises, systems, insurance, administration, other duties, financing and taxes are excluded. It is not SDE, annual profit, an industry margin or company value.
Test continuing rights and cohort economics
Define actual opening customers/policies, period and denominator for renewal analysis. Separate count retention from premium and company-commission continuation. Identify cancellations, rewrites, commission changes and new business so growth does not conceal losses in the opening book. Review contingent/bonus income under actual eligibility, calculation, reversal and payment terms rather than automatically treating it as recurring or excluding it.
Illinois DOI distinguishes individual and agency licensing records.
(Illinois DOI: individual and agency licensing lookup guidance)Use this as a state-specific pointer to actual authority review. Have counsel and responsible carriers/authorities establish proposed operator conditions and actual captive/independent carrier, producer and book rights. Review assignments, consents, termination and renewal through the consent register; a license or book list does not independently prove every continuing right.
Include permanent qualified service and remaining duties
Use the earnings reconciliation for actual permanent producer, customer/renewal service, carrier administration, systems, management and owner-replacement costs. Map qualified coverage through the coverage worksheet. Required policy work and recurring vendor spending are separate from unsupported blanket add-backs or cost-free seller assistance.
Allocate premium/remittance balances, commission returns, producer duties, pending renewals, customer requests, refunds/credits, disputes and vendor bills through the delivery guide. Have qualified advisers assess actual fund rights and lawful customer-data access. Compare supported continuing earnings, rights, necessary investment and funded obligations; no universal retention, concentration or loss-ratio threshold independently determines price.
Owner questions
Which insurance-agency multiples are supported here?
Only the stated national2021–2025 reported sold owner-discretionary sample; actual matched company evidence and rights scope still require review.
Is the 7,500-dollar example annual profit?
It is the balance after assumed returns and two costs, before management, premises and other expenses.
Do renewals guarantee recurring income?
Test actual cohort behavior, carrier/producer terms, commission changes, customer choice and continuing service costs.
Sources and review scope
Source review completed . The sources below support the identified concepts or rules; they do not validate hypothetical amounts or a valuation of your business.
- BizBuySell: reported insurance-agency sales
National reported 2021–2025 sold owner discretionary earnings lower quartile 1.88, median 2.70, upper quartile 3.44, actually read October 10, 2026. Small local agencies, including some agent book-of-business sales; not an isolated captive/independent line-of-insurance sample, insurer or title-company appraisal, managed-platform EBITDA, asking prices or current local recommendation.
- SBA: closing or selling a business
Valuation approaches, sale agreements, assets and ownership transfer.
- Illinois DOI: individual and agency licensing lookup guidance
Official lookup guidance actually read October 10, 2026. Distinguishes individual and business-entity records; lines of authority depend on individual agents rather than an agency license. Illinois example only; no actual license searched, NAIC terms accepted, carrier appointment verified or complete law/ownership-change approval determined.
Confirm tax, legal, accounting and lending applications with the relevant professionals. Historical market observations describe the stated period and reported sample.
This is educational material. Industry figures and program rules can change; check the original sources and your advisors before applying them to a transaction. Calculator scenarios are not appraisals, lending decisions, or offers.
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