Selling an Insurance Business

Most agencies are valued on cash flow, usually EBITDA or SDE, with extra scrutiny on renewal quality. Buyers adjust for retention by line and carrier, carrier concentration, producer portability, and how much income is renewal commission versus a one-time bonus. They also look closely at chargebacks, contingencies tied to loss ratio, and producer comp because those change net earnings. For a starting estimate using real transaction data, try the free valuation calculator, then sanity-check it against your retention reporting and carrier-approval timeline.

Multiples depend on line mix, carrier stability, and how transferable the book is. Agencies with strong renewal commissions, clean retention reporting, diversified carriers, and low owner dependence tend to land at the top of the range. Personal Lines-heavy books can price differently than middle-market Commercial, and Benefits/Life brings its own persistency and compliance factors. If a meaningful share of profit is contingencies, many buyers discount it unless it’s consistent across years and carriers. Use the free valuation calculator to see realistic ranges and the drivers behind them.

Yes. Many independent agency deals are SBA 7(a)-financed when renewals are stable and financials tie back to carrier statements. Lenders usually want clean tax returns, predictable renewal income, and a clear plan for carrier approvals, licensing, and expiration ownership. Heavy earnouts, unclear producer agreements, or messy commission reconciliation can slow approval. You can test buyer affordability and payment scenarios with the SBA loan calculator before you negotiate structure.

A prepared agency can reach LOI in a few weeks, but closing often hinges on carrier change-of-control approvals and any aggregator re-papering. Diligence also takes time for commission statement reconciliation, E&O history, licensing and appointments, and AMS data review. Deals bog down when sellers cannot quickly produce retention by carrier and line or explain chargebacks and contingencies. Rejigg keeps things moving with a built-in data room and deal tracking so buyers can review quickly without repeated document chases.

No. Many brokers charge 5–10% and run outreach and offer management, which some owners can handle directly if they’re organized and know what buyers will request. The trade-off is time and process discipline, especially around confidentiality and diligence. Rejigg covers the mechanics many brokers control: pre-vetted buyers, digital NDAs, a secure data room for carrier and commission files, and side-by-side offer comparison. Start with the finding buyers guide to structure your process.

Agencies sell both ways, and the best structure depends on how your appointments, licenses, and contracts are set up. Stock or entity sales can make it easier to keep agency codes and carrier relationships intact, but buyers will dig into legacy liabilities, taxes, and employment issues. Asset or book sales can limit inherited liabilities but often require more carrier re-appointments and operational rework. It’s worth asking each key carrier how they handle a transfer in your situation. The deal negotiation guide walks through the trade-offs.

Earnouts show up often because renewals can be measured after close and retention risk is real. Client shopping, producer departures, carrier appetite shifts, and chargebacks can all hit the book right after a sale. A good earnout spells out the metric (often renewal commissions collected), the measurement period, and exclusions for events outside the seller’s control, like a carrier exit or buyer-driven market moves. Vague earnouts lead to disputes over what counts as “retained.” Rejigg helps you compare earnout terms versus higher upfront offers in one place.

Many agencies are light on traditional working capital, but buyers still care about cash timing. Carrier pay cycles, agency-billed receivables, return premiums, and producer commission timing can create real swings. If you handle client funds, trust accounts and reconciliations usually become key diligence items and may drive cash-at-close requirements. Make sure operating cash is clearly separated from client money, and agree on cutoffs for receivables, payables, and refunds. The checklist in due diligence and closing helps prevent late surprises.

Expect requests beyond financial statements. Buyers usually ask for carrier commission statements, retention by line and carrier, producer agreements and comp grids, licensing and appointment lists, E&O loss runs or claims summaries, and procedures for premium handling (direct bill versus agency bill and any trust account reconciliations). Many buyers also want AMS exports or a walkthrough showing renewal dates, activities, and servicing notes. Rejigg’s data room lets you upload once, control access, and release sensitive items only after digital NDAs are signed.

Confidentiality matters because rumors can trigger client shopping, producer anxiety, and carrier questions. Most sellers stage disclosure: share financials and retention under NDA first, bring in key managers next, then talk to carrier reps once a buyer is real, and save client outreach for near-close. The exact sequence varies by market and by how strict your carriers are on ownership changes. Using a platform with pre-vetted buyers and enforced NDAs reduces leaks. Rejigg requires digital NDAs before sensitive documents are visible and keeps communication centralized.

Most buyers ask for a non-compete and non-solicit because they are buying renewal commissions and relationships. The details matter in insurance. Scope should match what the buyer is purchasing, including lines of business, geography, and the term. If you are keeping any excluded niche or side book, carve-outs should be explicit so there is no confusion later. Buyers also care about non-solicitation of producers and staff. Rejigg helps you compare offers side by side so price and restriction level are evaluated together.

Taxes depend on deal structure and allocation. Asset versus stock sales can produce different outcomes, and how goodwill and expirations value are allocated affects capital gains versus ordinary income treatment. Earnouts can also change timing and character of income depending on the paperwork. State tax issues may come up if you write across multiple states. Bring your CPA in before LOI so you can model scenarios and negotiate with after-tax proceeds in mind. The negotiate a deal guide covers the terms that tend to move after-tax results.

Plan the transition around renewals and relationships. Most deals work best with joint introductions for top accounts, a defined handoff to carrier reps, and a clear internal message to producers and service staff about what changes and what stays the same. Buyers often ask for 30–180 days of seller support, sometimes longer if the owner is the main relationship holder. Put duties in writing, such as client calls, carrier approval support, or AMS migration help, rather than a vague consulting promise. The transition planning guide helps you set expectations early.

Most buyers want your team to stay because service continuity protects retention. The biggest risks are producer concerns about comp, changes to roles during integration, and system changes that slow service. You can reduce friction by documenting comp grids, showing how renewals are handled, and letting the buyer meet key staff at the right stage of the process. Some buyers offer retention bonuses or short-term guarantees for critical team members, depending on the market and staffing. Rejigg’s messaging and scheduling tools help you coordinate structured meet-and-greets without turning the sale into a free-for-all.

Buyers typically reconcile your P&L and general ledger to carrier commission statements. They look for consistency in renewal patterns, chargebacks, and contingency payments, and they test seasonality because carrier pay cycles and producer comp timing can distort monthly results. They also check whether income depends on a single carrier relationship or a one-time bonus year. A clean bridge from carrier statements to the books and tax returns speeds diligence and usually improves confidence on price. Rejigg keeps these reconciliations organized and permissioned for serious buyers.

Carrier concentration usually does not kill a deal, but it will affect underwriting and terms. Buyers want to understand why that carrier dominates, whether the appointment will transfer cleanly, and what alternatives you realistically have if appetite changes. In some markets, concentration is common for niche programs or regional commercial placement, and buyers may accept it with strong carrier relationships and backup markets. Expect more focus on carrier approvals and possible holdbacks. Rejigg helps you present carrier mix and mitigation clearly so buyers do not assume a worst-case outcome.

Timing depends on your renewal calendar and the carriers’ approval cycles. Closing right before peak renewal season can strain service and make client communication harder, especially in Commercial, where remarkets take time. Many sellers aim to close far enough ahead of major renewal waves to complete handoffs calmly, or they plan transition duties around the heaviest commercial renewal months. The best time is when retention is steady and your team has bandwidth for buyer diligence and transition work. The prepare-to-sell guide helps align timing with readiness.

Compare more than headline price. In agency deals, proceeds depend on structure: upfront cash versus earnout, how retention is defined, whether carrier approvals are a condition to close, and what happens if the buyer changes markets or systems right away. Also compare working-capital and trust-account requirements, plus your transition commitment and responsibilities after close. Small language differences can change risk materially. Rejigg’s offer dashboard lines up terms side by side so you can pick the best risk-adjusted outcome across price, financing, earnouts, and timeline.