Triangulation
Triangulation is the practice of running multiple valuation methods in parallel and reconciling their outputs into a single blended range, flagging when methods disagree by more than 20%.
What is triangulation?
No single valuation method is right for every agency. Revenue multiples are too blunt for high-margin agencies. EBITDA multiples are too sharp for sub-$250K agencies. Discretionary earnings doesn't apply once you have an institutional team. Producer NPV only matters if the seller stays on. Triangulation runs every applicable method, weights them, and surfaces a blended range.
The weighting depends on context. Above $250K EBITDA, EBITDA carries 70% weight and revenue carries 30% — EBITDA is the buyer's primary reference. Below $250K, the methods structurally diverge and get weighted 50/50. When EBITDA goes negative or doesn't apply, revenue carries 100%.
A divergence flag fires when two methods disagree by more than 20%. That's a signal — it almost always means margin is materially off industry typical, which deserves Tier 3 scrutiny.
Why it matters in agency valuation
A single-method valuation can be misleading. An agency with high revenue but low margin will look great on a revenue multiple and terrible on an EBITDA multiple. Triangulation forces you to confront the gap and figure out which view a sophisticated buyer will adopt. It's how you avoid being surprised at the negotiation table.
Example
How MyAgencyValue uses this
MyAgencyValue's Tier 2 triangulates revenue and EBITDA multiples explicitly, applies a book-roll haircut, and flags divergence > 20% in the result.
Related terms
A revenue multiple values an insurance agency at a fixed multiple of its annual commission revenue, typically 1.5x to 3.5x depending on book composition and retention.
An EBITDA multiple values an insurance agency at a fixed multiple of its normalized EBITDA, typically 4.5x to 12x depending on agency size, growth, and book quality.
EBITDA margin is normalized EBITDA divided by revenue, expressed as a percentage — industry-typical for a P&C agency is 20–25%.
Book roll is the process by which an acquired book of business transfers from the seller's agency to the buyer's agency post-close, and book-roll probability estimates how much of the book actually retains through that transition.
Last reviewed: April 24, 2026
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