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Know Your Worth: How to value an insurance brokerage

Updated: August 05, 2026

At a glance

  • Why insurance brokerage valuations matter for transactions and planning. 
  • Four qualitative and quantitative factors that influence the value of an insurance brokerage. 
  • Investor considerations shaping brokerage deals today.  
  • Four next steps to prepare for valuation and exit decisions. 

It's a challenging time to be an insurance broker in Canada. In addition to increasing consolidation, the insurance industry is facing a number of headwinds related to digital disruption, changing tax legislation and regulatory requirements, shifting age demographics, alongside increasing climate risk and economic volatility.

To prepare for and manage these market changes, it is crucial for owners to obtain an accurate, reliable business valuation.

Values for insurance brokerages have grown over the last few years and are expected to hold steady for the near term, but they have reached a plateau. The next five years will be a turning point for many brokers. As a business owner, you will need to decide if you're willing and able to adapt to the changing market, or if selling your insurance brokerage is the next step.

Why is a valuation important for insurance brokers?

Typically, an insurance broker requires a valuation in the following situations: as part of a transaction, such as selling the business or bringing in a new partner; to obtain financing; to assist with tax planning; or for compliance needs, such as financial reporting or tax filings.

A valuation can help a broker determine the optimal time to exit the business. Sell too early and you risk losing significant cash flow gains. Sell too late and the business may be worth less in only a few years' time.

Offers to buy your business can happen at any time. Owners must understand the true worth of their brokerage and be prepared to respond to opportunities.

How do you value an insurance brokerage?

Performing a valuation on an insurance brokerage is a complex task. A number of qualitative and quantitative factors will influence the worth of the business. To get started, consider these items:

Consider the positive and negative cash flows that occur within the business. A brokerage's IRR can be a decisive factor for an investor. A valuations professional can help brokers measure their IRR against the market, to determine if the metric is comparable and attractive to buyers.

Revenue, EBITDA, and assets under management (AUM) are key metrics in a valuation. Brokers should consider the profitability, growth, and outlook of the business, as well as the risk on cash flow. As with the IRR, an experienced valuator can help brokers compare and calibrate these metrics to market values.

The type of insurance a broker sells can affect the worth of the business; life insurance, for example, often has the highest value. Diversification is key. Selling multiple products and offering additional services, such as investment management, can indicate a greater chance of profitability for a buyer.

The number and strength of client relationships is an important value indicator. A book of business that has a high volume of clients, including a healthy amount of long-term customers, can present less risk for a potential buyer. Similar to the products you sell, a diverse range of clients can also command a higher value.

The investor perspective

In many cases, buyers are large insurance companies following an acquisitions strategy to grow their business. However, some transactions involve the addition of an internal or external partner who is buying into the brokerage. In either case, investors may be asking themselves these questions:

  • How is the business positioned to respond to ongoing industry disruption, including digital transformation, AI adoption, and shifting distribution models?
  • What are the opportunities for continued business growth?
  • How will changing interest rates affect the brokerage?
  • What are the opportunities for cash flow synergies and cost savings?
  • What are the opportunities for cost of capital synergies?
  • How long will it take to realize the return on investment?

What are the next steps for insurance brokers?

Brokerage owners often have a high-level sense of the overall value of the business, but may not be prepared to enter a deal environment. Many brokers do not have the internal systems or readily available data needed to assess the business's worth accurately. To get started on the valuations process, consider the following steps:

Whether your plans involve selling outright or bringing in new partners, begin to map out your eventual exit. Consider your retirement plans, client portfolio, and ideal timeline for selling the business. No matter the direction, base your decisions on quantitative support rather than instinct or gut feeling.

Changing demographics, digital transformation, and legislative and regulatory changes are just a few of the factors that could significantly alter your brokerage (and its value) over the next few years. Consider whether you have the time, desire, and capacity to make the necessary investments to counter these risks.

Think through the various risks and their potential outcomes. Brokerage owners must have adequate resources to manage industry changes and still be able to grow the business. In some cases, selling could be the best way to realize the brokerage's value.

Without professional guidance, brokerage owners run the risk of an unfavourable outcome. A valuations advisor can help you identify potential buyers, organize and present company data, determine an accurate price for sale or buy-in, and negotiate the best transaction possible.

Build a stronger strategy to sell your business

Deepen your understanding with practical insights and clear next steps in our comprehensive guide, built to support every stage of the sale process.

If you’re exploring a transaction, our team can assess your brokerage and identify opportunities to strengthen your book and valuation.

Guide

A complete guide to selling your business

Our selling your business guide provides practical insights to help you understand the sale process, prepare your business, and make informed decisions before going to market.

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