Focuses on fair market value of tangible assets (equipment, real estate) minus liabilities, plus intangible "goodwill". 2. Due Diligence Checklist
Buying an insurance agency is a complex but potentially lucrative investment, often valued between . A successful acquisition requires rigorous due diligence on the "book of business," securing specialized financing, and planning for a multi-month transition period. 1. Valuation Models buy an insurance agency
Before finalizing a deal, you must verify the health of the "book" (the list of active policies): Focuses on fair market value of tangible assets
Agencies are primarily valued based on their profitability and recurring revenue. Common methods include: A successful acquisition requires rigorous due diligence on
The industry standard. Agencies typically sell for 8x to 12x their earnings before interest, taxes, depreciation, and amortization. High-performing agencies with 25-30% profit margins command higher multiples.
Often used for smaller books of business, where the value is roughly 1x to 1.5x annual commissions .