Selling your insurance agency to private equity

Where private equity stands in insurance agencies (2026)

Insurance brokerage was one of the first services private equity learned to roll up, and the consolidation has run for well over a decade. The result is a mature market of large aggregators, most of them private-equity backed, that buy agencies continuously across the country. Reported active acquirers include Hub, backed by Hellman & Friedman, Acrisure, BroadStreet, backed by Ontario Teachers', AssuredPartners, backed by GTCR, PCF, backed by HPS, World Insurance, Inszone, Risk Strategies, backed by Kelso, and Alera, backed by Genstar. Naming these platforms describes the market; it is not a recommendation of any of them.

Because the market is so mature, agency deals are more standardized than deals in newer roll-up categories like IT managed services, and the pricing language is specific to insurance. A buyer will talk to you about revenue multiples, contingent commissions, book retention, and carrier portability, not just EBITDA. That is the language this page uses, because valuing your agency on EBITDA alone is the fastest way to misjudge what it is worth. The rest of this page covers what drives your price, how the deal is put together, what you keep after tax, and what changes once you join an aggregator.

What is my insurance agency worth?

Agencies are valued two ways at once, and both matter. Larger agencies are quoted on adjusted EBITDA, and smaller books are often quoted on commission revenue. In 2026, reported ranges run about 7 to 9 times adjusted EBITDA for a lower-middle-market agency with $2 to $10 million of revenue. Small books trade closer to 1.5 to 2.5 times commission revenue on the Reagan Consulting best-25 percent benchmark. Larger deals report 9 to 12 times for a regional agency, 12 to 16 times for an aggregator acquisition, and 14 to 18 times on a recapitalization, where the seller stays invested through the platform's own sale. These are ranges other sellers have reported, not an offer to you.

Where you land inside those ranges turns on factors particular to insurance.

• Book retention, the share of your business that renews each year. Reported deals show retention above 90 percent supporting the top of the range, while retention below 85 percent tends to trigger an earnout that holds back part of your price until the book proves out.
• Contingent commissions, which are normalized to a three-year average rather than valued at your best year, so a steady record is worth more than a single strong year.
• Your line of business, because employee benefits books command one to two turns more than property and casualty books.
• Carrier portability, meaning how cleanly your appointments and policies can move to the buyer, which affects both the multiple and how much of the price is paid in cash.
• Clean books, meaning reviewed financials, a well-kept agency management system, and separated personal expenses.

The valuation page covers how earnings are adjusted and how the working capital peg works, and the calculator turns a headline number into an after-tax figure.

How the deal is usually structured

The headline price is enterprise value, not your check. A typical agency deal pays around 60 to 70 percent in cash at close. Founders selling to aggregators typically roll 20 to 50 percent of their price into the buyer's holding company as equity rather than cash, a wider rollover range than most trades see, because aggregators want producers invested in retaining the book. Another 5 to 10 percent is held in escrow against problems found after closing, and a working capital peg requires you to leave a set level of working capital in the business.

Two features are specific to insurance. First, if your book retention is below the top band, expect an earnout, where part of your price is paid only if the book stays after the sale. Second, carrier consent is real diligence. Your appointments and your clients' policies do not transfer automatically, so the deal depends on broker-of-record letters and carrier consent to move the book to the buyer. A book that cannot move cleanly is worth less, no matter how good it looks on a spreadsheet. Representations and warranties insurance is common on larger deals. The deal terms glossary defines each term, and rollover equity covers the piece that stays at risk.

How you will be taxed

Most of your price is goodwill, taxed as long-term capital gain at 20 percent federal plus your state's rate. An agency carries little depreciated equipment, so the depreciation recapture that hits trades sellers is a small issue for you. That makes the purchase price allocation between goodwill and the non-compete the main tax question. A covenant not to compete is ordinary income to you at up to 37 percent, and consulting or transition pay is ordinary income plus payroll tax. Because the buyer is often indifferent to how much of the price is called a non-compete while it costs you real money, the allocation deserves close attention. The full mechanics are on the how a sale is taxed page.

QSBS deserves an honest and cautious word, because an agency sits in a gray area. Section 1202 excludes financial services and brokerage, and an insurance agency is close to both, which argues against eligibility. But the IRS once ruled privately that an insurance agent was a qualified business, which means the door is not entirely closed. The result is genuine uncertainty. Add to that the C-corporation requirement, which applies here as everywhere, and the fact that most agencies are S corporations or LLCs that hold no QSBS at all, and the practical answer for most sellers is that QSBS is not available. Never assume it applies to an agency, and never let a buyer or broker price it into your expectations without a written CPA opinion behind it. The QSBS page walks through the uncertainty in full.

What changes after you sell

After closing, you hold a cash check and you no longer own your agency. Most aggregators want you to keep producing or managing for a few years, but inside their system. Your carriers, agency management software, service teams, and back office usually move to the platform's way of doing things, and how you are paid on new and renewal business changes. For an owner used to choosing carriers and setting the service model, that loss of control is often harder than the change in money, and it is the part sellers most often underestimate.

Your income changes too. The distributions the agency paid you stop, replaced by a producer or manager compensation plan that is usually smaller, and by whatever the rollover pays someday. The rollover is a minority stake in a private, leveraged company you no longer control, and it may be worth more at the next sale or nothing at all. Plan your household around the cash you kept and treat any rollover payout as a bonus. The after-sale plan and managing rollover equity pages cover the money side.

Who should not sell right now

Selling to an aggregator is not right for every owner, and an offer can make the choice feel already decided.

• If your book retention is below about 85 percent, selling now likely means a large earnout, and a year or two spent tightening service and renewals can move you into the top band and turn earnout dollars into cash at close.
• If your contingent commissions have been lumpy, building a steady three-year record first raises the figure the buyer will actually pay a multiple on.
• If a large share of your book cannot move cleanly to the buyer's carriers, the portability problem will surface in diligence, so it is better solved before you go to market.
• If you cannot picture yourself producing inside someone else's system, with their carriers and their pay plan, for several years, the cash may not be worth the change in your working life.

What to do next

1. Tighten retention and smooth your contingents

   Raising book retention toward the top band and building a steady three-year contingent record are the two changes that move an agency's price most, and both take time you only have before you go to market.

2. Check carrier portability early

   Understand which appointments and policies will need broker-of-record letters or carrier consent to move, because a portability problem found in diligence can cut your price or your cash at close. Benefits books and specialty programs deserve particular attention.

3. Do not assume QSBS, and plan the real levers

   Treat QSBS as unavailable unless a written CPA opinion says otherwise, and focus on the purchase price allocation and any installment treatment instead. See how a sale is taxed.

4. Plan the money before the check lands

   Decide how the cash will replace your income and how you will treat a rollover that may run as high as half your price, using the after-sale plan. When you want a second opinion, the contact page explains how a first conversation works, including when we will tell you that you do not need us.