4 Insurance Agency Valuations Trends to Watch

• March 11, 2026

By Jeff Smith

In 2026, independent insurance agencies face a valuation landscape shaped by a softening insurance market, prolonged economic uncertainty, continuing agency consolidation, shifting ownership dynamics and rapidly evolving technology.

For agency owners contemplating perpetuation, a sale or simply benchmarking their business value, understanding the following trends is critical for business planning. Here are four trends to watch.

1) Organic Growth Rates Will Get Greater Focus

According to IA Valuations, agencies have experienced an average revenue growth rate of 11% over the past two years. However, do not expect this to continue in the soft market.

Over the past several years, agencies have experienced rate-driven revenue growth. Now, organic growth is returning to center stage.

The hard market that fueled premium increases is softening, meaning agencies can no longer rely on pricing momentum to inflate top-line results. Instead, growth will depend on traditional organic growth fundamentals: producer investment and development, growing policies in force count, and successful new business acquisition.

While retention will always be a top priority, agencies that can couple high retention rates with organic growth rates in the high single to double digits will likely outperform the industry and experience higher valuation multiples.

2) The Stress of Ownership and Management Will Be Reduced

With the pandemic, prolonged economic turmoil, and the hard market all stacked on top of each other, owning and managing an agency has been stressful. However, with the softening market, some of the stress of owning and managing an agency will be reduced.

Specifically, with an improving rate environment, the stress on staff should be significantly reduced as remarketing accounts should decrease dramatically. This should lead to less burnout for the agency staff and an opportunity to focus on new business sales and upskilling in technology.

In addition, most carriers have now experienced a year or two of highly positive underwriting results with combined ratios in the low to mid-90s. The return of carrier profitability should reduce some pressure on agencies at risk for compensation changes or losing appointments.

However, if maximizing agency value remains a goal, it should not lead to complacency. Agency owners who leverage this period of normalcy to create a clear succession plan and strong leadership continuity will be considered lower-risk investments and be rewarded with higher valuation multiples. Conversely, agencies lacking depth in their leadership, production team and service staff will experience lower valuations and limited buyer interest.

3) It’s Still a Sellers’ Market

Mergers & acquisitions remain robust, though down slightly from their peak in 2020 and 2021. Rising interest rates and tighter capital markets recently tempered deal volume, but M&A activity remains strong, and therefore valuations for high-quality agencies remain at all-time highs.

The M&A landscape remains largely the same as in the previous decade, with private equity (PE)-backed platforms continuing to dominate, driving consolidation and driving sellers’ valuation multiples.

Current IA Valuations data shows EBITDA multiples ranging from 6x to 9x for small to midsized generalist agencies and 10x to 13x for larger, growth-oriented, commercial lines agencies in major metropolitan areas with strong leadership and scalable processes.

Talent and strategic fit matter as much as financial performance as buyers seek agencies that add production talent, complement their carrier and geographic footprint, and deepen specialty expertise.

For agency owners looking to maximize agency value, they should operate their agency as if they might sell it tomorrow. Investing in the fundamentals that drive organic growth, such as producer development and technology adoption, will lead to higher valuation multiples.

Demand should remain robust throughout 2026 and beyond. Consolidation in the IA system is no longer a trend but now a transformational business principle. The only lingering question is around the personal lines marketplace and whether heavily concentrated PL agencies will experience declining valuations. This has been a persistent question in the marketplace, and one that, to date, has not significantly impacted valuations.

Meanwhile, a wild card in this equation is the potential impact of artificial intelligence (AI) on the personal lines marketplace.

4) Technology Changes: From Modernization to Transformation

Technology is the true wild card in the valuation model for 2026 and beyond. While we are starting to see technologically proficient agencies outperform peer agencies by a wider margin on a year-over-year growth basis, the true valuation impact has been somewhat limited.

Technology investments are expensive, and they can affect year-over-year profitability without an immediate corresponding return on investment. 

However, increasing investment in technology is no longer optional; it is the cost of doing business. It’s also a valuation driver.

Agencies that embrace modern technology tools, such as AI-driven sales and service models, CRM platforms, cloud-based accounting, and automation, demonstrate scalability and efficiency—qualities that enhance agency value. Conversely, agencies clinging to legacy systems risk being viewed as operationally fragile.

The emphasis is on actionable technology: not just adopting tools but integrating them into workflows to enhance client experience and reduce costs. Agencies that can show measurable return on investment from technology, such as improved retention through digital engagement or streamlined back-office processes, will stand out with higher valuation multiples.

Jeff Smith, is CEO of IA Valuations and the Ohio Insurance Agents. 

The information provided in these documents is general in nature and shall not be construed as personal legal, tax or financial advice for your situation. Please contact@iavaluations.com to discuss your personal situation.

Published with permission. Copyright ©2025 by IA Valuations and Ohio Insurance Agents Association (OIA). All rights reserved. No portion of this document may be reproduced in any manner without the prior written consent of IA Valuations or OIA. In addition, this document may not be posted as a link on any public or private website without the prior written consent of IA Valuations or OIA.