What drives value in an insurance agency?

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Value in insurance agencies isn’t driven just by preparing for a sale – it’s about building a smarter, more resilient business. Key dynamics shaping agency value include leadership, growth, specialization, and client relationships

There are many good reasons why owners should understand the dynamics that drive insurance agency value. First and foremost is the fact that the value of an agency is a direct reflection of how well-run the agency is from the market’s perspective. So, when one looks at “the factors that drive value,” that’s the same thing as looking at the factors that make a business great in the eyes of outsiders. Why knowing your agency’s value mattersWhen insurance agency owners think of the value of their company, they most often think of it in terms of “What will it be worth when I sell it?” But most agency owners don’t launch (or run) their business with an exit strategy in mind. Put those two facts together, and we find that most owners don’t consider how to create value until they’re thinking of selling.

MarshBerry is a global leader in financial services and consulting dedicated to helping insurance brokerages and firms in the wealth management industry achieve sustained growth and value for every stage of ownership. With a legacy spanning over 40 years, MarshBerry offers an extensive suite of services, including investment banking (merger & acquisition advisory, capital raising), financial consulting (strategic planning, valuations, perpetuation planning), organic growth consulting (leadership, sales & talent solutions), executive peer exchange, agency network, and market intelligence and performance benchmarking. For more information, visit www.MarshBerry.com.

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Published Nov 17, 2025

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About us

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People

But an agency is likely the owner’s largest asset, and its value impacts virtually every aspect of the owner’s life. Even if a sale isn’t imminent, understanding how to build value in an agency can help

guide capital allocation inform strategic planning support partner buyouts or equity sharing assist with tax planning or loan applications

Ultimately, an agency’s value is more than a number. It’s a lens through which an owner can assess and improve the business, which then further increases value – setting off a virtuous cycle.

What buyers really look forA standard multiple of revenues is no longer a legitimate guideline for valuation. In fact, strategic buyers in the insurance M&A space aren’t just looking at financials. They’re evaluating the sustainability, scalability, and risk profile of an agency. Here are the primary dynamics that contribute to value beyond financials:

invest in recruiting and retaining top talent invest in time-saving/productivity-enhancing technologies have compensation structures that encourage talent growth demonstrate leadership continuity and development

Intentionally designed to reinforce sustainable growth and enhance revenue

1. Strong leadership and talent bench – with ongoing adoption of automationA deep and balanced talent pool is essential, as is a focus on incorporating tech efficiencies. Agencies with aging producer-profiles, no clear succession plan, and outdated platforms are less valued than those that

2. Diversified lines with organic growth among multiple carriersRevenue concentration is a red flag, as is growth that results primarily from “hard-market” rate increases. Agencies with a large portion of income tied to a small client base, aging clientele, a single line (or limited number of lines), and/or concentration among a few carriers may struggle to sustain growth. Value is enhanced by

a balanced client mix multiple revenue sources multiple carriers (e.g., less than 30 percent of business with any single carrier) demonstrable organic growth

3. The inclusion of a niche focusAgencies that serve specific markets or client segments – whether geographic, demographic, or industry-based – are often more attractive. Specialization signals expertise, loyalty, and pricing power. 4. Institutionalized client relationshipsIf most client relationships hinge on the owner or a few key advisors, the agency faces “key person” risk. Buyers want to see

distributed client relationships across the team systems and processes that ensure continuity a scalable service model

Valuation as the basis for better decisionsWhile financial metrics like EBITDA (earnings before interest, taxes, depreciation & amortization) and revenue are foundational, they don’t tell the whole story. Two businesses with similar financials can have vastly different market values depending on all the factors listed above – and more. Buyers will assess both tangible and intangible factors to determine how sustainable and scalable a business is. Owners who regularly assess the value of their agency not only know their company’s worth but gain insights into the areas that are strong as well as those that can be strengthened. Is FirstChoice, a MarshBerry Company, right for you? FirstChoice is your go-to resource to build agency value through our investments in carrier relationships, increased revenue, education, and technology. Learn more about FirstChoice growth solutions if you are not already a member and are interested in the nation’s number one agency partner.

If you would like to learn more about how FirstChoice can help your agency determine its path forward, please email or call Keith Captain, president, FirstChoice at 704-831-8708.

Agency value

Looking at “the factors that drive value” is the same thing as looking at the factors that make a business great in the eyes of outsiders. Owners who regularly assess the value of their agency not only know their company’s worth but gain insights into the areas that are strong as well as those that can be strengthened.

About FirstChoice

715+ members across 43 states and the District of Columbia 90+ PL, CL, and E&S carriers $19.1B+ agency-controlled P&C premium 400+ annual strategy meetings $3.3B in aggregated premium Membership includes no non-competes no right of first refusal favorable exit terms no monthly reporting requirement support to remain independent

If you would like to learn more about how FirstChoice can help your agency determine its path forward, please email or call Keith Captain, president, FirstChoice at 704-831-8708.