Insurance Agency Valuation: $1M–$3M Books

Highlights

The $1M–$3M revenue tier is the most active segment of the private agency M&A market by transaction count. Individual acquirers, growing agencies pursuing tuck-ins, and small regional platforms all compete for well-positioned books in this range. These are directional benchmarks and do not constitute legal, financial, or investment advice.

How a $1M–$3M Book Is Typically Valued

Typical method: Revenue multiple applied to trailing twelve months of commission and fee income.

Directional range: 1.5x–2.5x annual revenue.

This is the broadest spread in the market relative to size. A $2M book at 1.5x sells for $3M. The same book at 2.5x sells for $5M. The $2M difference reflects the specific quality of the book: retention rate, owner dependency, commercial vs. personal lines mix, carrier concentration, AMS data quality, and the seller’s willingness to support a clean transition.

What Buyers Are Looking For at This Size

Buyers at this tier include growing independent agencies adding books to their existing client base, producers or agency managers purchasing their first book, and regional brokerages pursuing geographic tuck-ins. Diligence typically requires three years of revenue documentation, a client list with line of business breakdown, carrier appointment confirmation, and a meeting with the seller to assess transition support expectations.

What Moves the Multiple Up or Down

Retention rate is the primary driver. 93%+ retention commands premium pricing. Below 85% is a meaningful discount.

Owner dependency is the most common multiple-suppressor. Owners willing to provide 12–24 months of post-close transition support, or who have already built a service team that operates independently, command better offers.

Commercial vs. personal lines mix. A $2M book that is 60% commercial prices better than a $2M book that is 90% personal lines.

Carrier concentration. More than 40–50% of revenue from a single carrier is a diligence flag that buyers price into the offer.

What to Do Before You List

Three things move you from the middle to the upper end of this range: clean AMS data, documented retention history, and a credible answer to the question of how the book survives your departure.

For the complete valuation framework: Agency Valuation Calculator

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Directional benchmarks only. Not legal, financial, tax, or investment advice.