Insurance Agency Valuation in Texas
Texas is one of the most active states in the country for independent P&C agency mergers and acquisitions. Strong population growth, an expanding commercial market, and a large base of independent agents create a robust buyer pool. Valuing a Texas P&C agency requires understanding both the national valuation framework and the state-specific factors that affect pricing in this market.
How Texas agencies are valued
Texas P&C agencies are valued on a multiple of annual revenue or EBITDA, consistent with national norms. Most Texas agencies sell in the range of 1.5x to 2.5x annual commissions for smaller books, and 7x to 11x EBITDA for agencies with $3M+ in revenue. Texas’s strong economy and growth trajectory support multiples at the higher end of national ranges for well-run agencies.
Texas-specific factors that affect valuation
CAT exposure. Hail, wind, and flood claims in Texas are among the highest-frequency CAT events in any state. Books concentrated in high-hail corridors (DFW, San Antonio, Houston) or coastal flood zones face tighter buyer underwriting. Carriers’ profitability on a Texas book affects renewal stability and therefore the reliability of the revenue stream buyers are paying for.
Growth premium. Texas’s population growth — particularly in DFW, Austin, Houston, and San Antonio — provides an organic book growth premium. Agencies with documented organic growth of 8%+ in these markets typically command premium multiples from acquirers who are underwriting future growth, not just current revenue.
Commercial lines depth. Texas’s energy, construction, manufacturing, and agriculture sectors create significant commercial lines demand. Agencies with depth in these verticals have books that are harder to replace and therefore valued at higher multiples than personal lines books of equivalent revenue.
Frequently asked questions
What is a Texas insurance agency worth?
Most Texas P&C agencies are valued at 1.5x to 2.5x annual commissions or 7x to 11x EBITDA, depending on book composition, CAT concentration, retention, and growth. Texas agencies in growth markets with diversified commercial books are among the most valued independent agency assets in the country.
For the full valuation framework: Insurance Agency Valuation: The Complete Guide