How are insurance agencies valued in the market?
Historically speaking, the market value of an agency as a function of pro forma EBITDA multiple is a sliding scale that increases with the size of the agency. Typically, a small insurance agency is valued at 4-6 x pro forma EBITDA, a mid-sized agency is valued at 6-8 x pro forma EBITDA and a large agency is valued at 8-10 x pro forma EBITDA.
What makes an insurance agency an insurance company?
What Is an Insurance Agency? An insurance agency — sometimes called an insurance agent — is an individual or company authorized by a carrier to sell the insurer’s products in exchange for compensation. Agents are regulated by the laws of the state in which they work.
How many acquisitions has inszone insurance company completed?
Inszone has completed ten acquisitions over the last fifteen months with offices in California, Arizona, and Nevada. In the wholesale and MGA arena, Ryan Specialty Group and All Risks will be merging their operations.
Who are the largest insurance brokerages in the world?
Marianne Bonner, CPCU, ARM, worked in the insurance industry for 30 years. Now she consults and writes about commercial insurance. The world’s 15 largest insurance brokerages appear in the table below. The rankings are derived from revenue generated in 2017.
Historically speaking, the market value of an agency as a function of pro forma EBITDA multiple is a sliding scale that increases with the size of the agency. Typically, a small insurance agency is valued at 4-6 x pro forma EBITDA, a mid-sized agency is valued at 6-8 x pro forma EBITDA and a large agency is valued at 8-10 x pro forma EBITDA.
When did I start doing insurance agency acquisitions?
The level of knowledge regarding insurance agency acquisitions in the industry has increased significantly since I started to do deals 10 years ago, which is encouraging.
What makes an insurance agency worth more than a peer?
Agency A’s EBITDA is 75% higher. At the most basic level, a business that generates greater cash flow should be worth more than a peer who is generating significantly less, right? The second figure that stands is the buyer’s Return on Invested Capital (ROIC – in this scenario is the amount of cash they put down at closing).
How are insurance agency valuations based on EBITDA?
This time, the asking prices are based on EBITDA multiples. A couple of numbers jump out when looking at the figures above. First, there is a dramatic difference in the prices of the two firms. Agency A’s purchase price is $900,000 higher than Agency B.