Insurance Agency M&A Outlook
Nearly three of every four agency acquisitions are now made with private equity capital. Elevated interest rates pressed against that tide for three years — and the multiple never broke. Here is what the market pays, who actually sets the price, and why 2026 may reward the prepared seller.
Volume bent. Price didn’t.
Three years of expensive debt cut deal count by a third from the peak — yet agency multiples gave back less than half a turn. That tells you everything about how much capital still wants this industry.
The headwind was real. The benchmark SOFR rate climbed from near zero to 5.4% by December 2023, the steepest rate climb in recent history, and the typical agency acquirer borrows at roughly SOFR + 450 basis points. For the first time in years, the spread between a buyer’s expected return and its borrowing cost went negative on deals above $1M of EBITDA. Cheap debt had been the rocket fuel of the consolidation trade; suddenly every tuck-in had to clear a much higher bar.
What gave was volume, not price. Deal count declined for a fourth consecutive year; the trailing-twelve-month rate stood at 686 through Q1 2026, well below the 2021 peak of 1,034. Q1 2026’s 148 deals marked the slowest first quarter since 2016, the tenth straight quarter below trend. Yet average multiples on $1M+ EBITDA deals held remarkably firm: 11.9x in 2024, easing only to 11.4x across 2025 — still roughly 20% above 2020 levels. Buyers absorbed higher debt costs and got pickier instead of cheaper; the average acquired agency has grown larger as capital concentrated on quality.
Now the wind is shifting. The Fed’s cuts have narrowed the spread to roughly (0.3)% as of mid-2025, with a return to positive territory expected — restoring leverage capacity to the buyers who never stopped wanting these assets. We see deal volume bottoming in the mid-600s, with the rebound likely led by private equity acquirers. For owners, that is the setup: demand intact, financing improving, and scarcity value rising for quality firms.
Why private equity cannot quit this industry — and who sets your price
Insurance distribution may be the single most successful roll-up strategy in private equity history. Understanding the buyers’ arithmetic is how sellers stop guessing what their agency is worth.
The economics sponsors keep paying for
- Recurring revenue — policies renew annually with retention typically above 90%; the book itself is the asset
- Capital-light cash flow — no inventory, minimal capex, negative working capital; EBITDA converts to cash
- Proven margins — well-run agencies sustain mid-20s EBITDA margins with steady organic growth through the cycle
- Recession resilience — insurance is purchased in every economy; demand holds through every cycle
- Built-in growth — premium-rate inflation lifts renewal commissions automatically, independent of new business
- Fragmentation — tens of thousands of independent agencies, most without a perpetuation plan, supply decades of tuck-ins
- Multiple arbitrage — buy a $1M-EBITDA agency at 8–11x, mark it inside a platform valued at 14x+; the spread is manufactured equity value
PE consolidators
Roughly 30 PE-backed consolidators — Hub, Inszone, Acrisure, World, Alkeme and peers — executed 73% of all 2025 deals and 89% of top-19 acquirer volume. Their model prices the typical agency: debt at SOFR+450, sponsor return hurdles, and platform arbitrage. When your agency gets three bids, this group usually wrote all three.
Strategic publics
Gallagher, Brown & Brown, Marsh McLennan, Aon, and WTW set the top of the market — paying 14–16x EBITDA for scale assets (AssuredPartners, Accession, NFP). Their currency: cheaper capital, synergies, and a public-market multiple to arbitrage against.
Sponsor recaps
OneDigital at $7B+ with Stone Point and CPP Investments, BroadStreet with an Ethos-led group alongside Ontario Teachers’ — these mark the platforms whose math underwrites every tuck-in. Pension and sovereign capital entering at these marks signals conviction, not exit.
The MGA frontier
Specialty distributors, wholesalers, MGAs, and program managers now command the market’s richest pricing: all-in valuations averaged 19.4x pro forma EBITDA in 2025, several turns above typical upfront consideration (MarshBerry, May 2026). Deloitte calls MGAs private equity’s next big opportunity — underwriting economics without balance-sheet risk. PwC expects specialty P&C, E&S, and MGAs to keep attracting private capital through 2026.
What agencies are actually worth in 2026
Most owners will not get the headline 15x — the staircase is where pricing happens.
Scale still pays. Crossing $1M of EBITDA moves the average from single digits to over 11x, and each tier above that de-risks the buyer further. Buyers are selective, and the average acquired agency is larger today than it was a few years ago, so the premium accrues to firms that look like platforms in miniature.
| Earns a premium | Drags the multiple |
|---|---|
| Commercial lines & benefits mix — middle-market commercial P&C and recurring-fee benefits books price above transactional personal lines | Personal lines concentration — especially non-standard auto: high churn, carrier instability, thin margins |
| Niche & program specialization — industry verticals, E&S, and program business carry scarcity value and richer economics | Generalist small commercial — transactional books without a niche get priced as books, not businesses |
| Carrier diversification — broad market access, healthy loss ratios, and stable contingents read as durable revenue | Carrier concentration — one carrier dominating revenue, or earnings leaning on contingent commissions |
| Young, validated producers — a bench that sells without the owner converts directly into purchase price | Aging producer bench — production concentrated in owners near retirement, with no perpetuation plan |
| Organic growth & retention — 90%+ retention with consistent organic growth puts you in the top tier of any process | Flat organic growth — buyers bridge stagnation with earn-outs and structure instead of cash at close |
Best-in-class agencies run three margin points ahead — and buyers price every one
Industry-average agencies versus best-in-class operators, on the metrics buyers actually underwrite. Operational excellence is not incremental: it is the difference between pricing as a book and pricing as a platform.
| Benchmark | Industry average | Best-in-class | What buyers read into it |
|---|---|---|---|
| Organic growth rate FY2024 | 9.0% | 10.7% | Growth in a hard market is table stakes; holding it as pricing softens is the proof |
| Pro forma EBITDA margin FY2024 | 23.6% | 26.1% | Each margin point above 23% adds roughly half an EBITDA turn at the bid table |
| Rule of 20 growth + ½ EBITDA margin | ~20.8 derived | 25.1 | Above 20 opens the competitive process; above 24 reaches the strategic ceiling |
| Sales velocity new biz / prior-yr commissions | 11.7% | ~15.7% | The new-business engine is the strongest predictor of post-close growth — buyers model it forward |
| Organic growth, quartile spread | 7.9% | 12.5% | The 4.6-pt quartile gap closes roughly 60% of the multiple spread between tier bands |
| Projected EBITDA margin FY2025 forecast | 23.4% | 30.0% | Forward margin is what buyers underwrite; 30% signals operating leverage, not luck |
| Revenue per employee FY2024 | ~$150–175K est. | $225–250K | The productivity gap signals platform leverage — headcount does not scale linearly with a buyer’s cost base |
The consolidation has consolidated
The last 24 months produced the largest brokerage deals ever recorded — and the consolidators themselves became the targets.
| Target | Buyer | Announced | Value | EBITDA mult. | Rev. mult. |
|---|---|---|---|---|---|
| Relation Insurance | BayPine | Feb 2026 | n/d | n/d | n/d |
| Newfront | WTW | Jan 2026* | $1.3B | n/d | ~5.2x |
| CAC Group $282M rev. | The Baldwin Group | Dec 2025 | n/d | n/d | n/d |
| OneDigital recap | Stone Point + CPP Inv. | Sep 2025 | $7.0B+ | n/d | n/d |
| Keystone Agency Partners recap | Warburg Pincus | Jul 2025 | n/d | n/d | n/d |
| Accession Risk Mgmt Risk Strategies / One80 | Brown & Brown | Jun 2025 | $9.825B | ~15.6x | ~5.8x |
| BroadStreet Partners recap | Ethos-led (BCI, WTM) | Apr 2025 | n/d | n/d | n/d |
| Woodruff Sawyer | Arthur J. Gallagher | Mar 2025 | $1.2B | n/d | ~4.5x |
| AssuredPartners | Arthur J. Gallagher | Dec 2024 | $13.45B | 14.3x† | ~4.6x |
| McGriff Insurance Services | Marsh McLennan | Sep 2024 | $7.75B | n/d | ~6.0x |
| NFP | Aon | Dec 2023 | $13.4B | ~15x | n/d |
| Average of multiples shown | ~15.0x | ~5.2x | |||
The 19 most active acquirers bought 466 agencies in 2025 alone — 69% of announced deal activity. Source: Sica | Fletcher (January 2026), 19 index members. All trademarks are the property of their respective owners; no affiliation or endorsement is implied.
Now we help owners act on it.
Our founder David McCombie published “Insurance Agency M&A: Strike Before The Market Cools” in Forbes — among the most-cited analyses of agency consolidation. The market described in these pages is the one that article anticipated: fewer, choosier buyers; resilient multiples; and a widening gap between prepared sellers and everyone else.
McCombie Group is an M&A advisory firm serving founder- and family-owned businesses. We have advised on successful insurance agency transactions and guided owners through approximately $2 billion of closed deals. Our founder wrote the book on the subject, Selling Your Business with Confidence (Wiley). We work the way this report reads: candidly, with data, and with your goals — legacy, team, timing, certainty of close — at the center.
Selling an insurance agency
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What multiple of EBITDA do insurance agencies sell for?
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Is 2026 a good time to sell an insurance agency?
How do I sell my insurance agency?
What makes one agency worth more than another?
This report reflects indicative market views as of July 2026, compiled from sources believed reliable but not independently verified. It is an informal market read — not an appraisal, a valuation opinion, or an offer to buy or sell any security. All third-party names and trademarks are the property of their respective owners and are shown for identification only.