Methodology
How we value an insurance agency
MyAgencyValue is built on a methodology used in real P&C agency transactions — the same logic buyers, sellers, and consultants apply when structuring a deal. We make it transparent so you can see why your range is what it is.
Tier 1: revenue multiple
The fastest cut at agency value applies a revenue multiple sized to the book's archetype. Personal-lines-heavy commodity books trade in the 1.5–2.0x range; balanced books in the 2.0–2.5x range; commercial-lines specialty books in the 2.5–3.0x range; and premium specialty books with 95%+ retention reach 3.0–3.5x. Retention adjustments push the applied multiple up or down by a quarter-turn.
Tier 2 (in development): EBITDA triangulation
Tier 2 layers a size-tiered EBITDA multiple on top of the revenue method, applies a pro forma normalization (owner comp at market, capped T&E, restored pension), and runs a quality-band adjustment of ±1.5x across eight factors: retention, growth trend, margin, book composition, producer concentration, account concentration, agency management system, and transition plan.
When the two methods disagree by more than 20%, Tier 2 flags the divergence so you understand which inputs are pulling the range.
Tier 3 (in development): full deal-room valuation
Tier 3 adds a discretionary earnings cross-check, a producer NPV overlay for principals planning to stay on, a 15-year after-tax cash-flow projection with monthly amortization, a sensitivity table, and a book-roll probability assessment. This is the diligence-grade view — the same model a buyer would build before submitting a letter of intent.
A note on directional honesty
MyAgencyValue is not an appraisal, not an offer, and not a substitute for diligence. Tier 1 ranges are intentionally wider than Tier 2 or 3 because we don't pretend to know what we don't know yet. Confidence improves with data depth — and we always show you the math.