The Five Factors that Have the Greatest Impact on Value at Sale

After years of owning and operating an independent agency, navigating the waters of selling your agency in the open market is a tall task. It raises many difficult questions, including:

When is the right time to sell? What factors are third-party buyers looking for when it comes to acquiring an agency? What should an owner be doing in the months (and years) leading up to the sale?

These are just a few of the many questions owners find themselves faced with when the time comes to sell. We have been asked these questions countless times, and we hope to use our knowledge to address a few elements for owners to consider in the time leading up to a sale: factors that can increase or decrease the value of the agency; what leads to agencies selling for more vs. agencies selling for less.

Factors to Increase Agency Value

Growth Rates

Agencies that are consistently growing on an annual basis are more attractive to potential buyers. Rather than slowing down or becoming stagnant, owners should strive to have their agencies running at peak operating efficiencies by the time they look to take it to market. Buyers want to acquire growing assets much more so than declining assets.


Growing in a profitable manner will add even greater value. An agency that is experiencing strong financial performance on the balance sheet, resulting in high profit margins between 25% – 35%, will absolutely see a boost in agency value as opposed to an agency whose profitability is languishing below 20%.

Retention of Key Staff Members

Skilled and knowledgeable producers/CSRs who know the business and clientele are extremely influential for potential buyers. Employees who are willing to stick around and work under new ownership can bring a lot of value to a deal.

In this industry of relationship building, the employees have huge impacts on client retention as they have already built the foundations. As a result, these staffers not only have strong relationships, but also understand individual and unique needs. When that stability and connection continues, clients are more likely to stay with the agency. Even an owner who is willing to stick around for a few years to help transition larger accounts can have a positive impact, but retaining key staff members for the long-term is a critical component of an acquisition that buyers look for.

Diverse Book of Business

This includes carrier lineup, personal and commercial line splits, and client demographics. Before taking your agency to market, analyze your agency’s book of business and find the strengths and weaknesses. Having a lineup of strong, reputable carriers distributed amongst your book, preferably between 8-25% of total premium written with each carrier, can maximize profit sharing and contingency opportunities.

Furthermore, our analysts recommend a personal and commercial lines split of 50/50, but the risk comes with an over-saturated personal lines book. With heavy personal lines, buyers are at risk if clients decide to shop around and look for other deals since they have no allegiance to the new owners. A diverse book of business will mitigate risk for a buyer and help ensure a successful transition.


A current and updated technology platform will make for a more appealing acquisition. An agency with efficient technology and paperless operations will not only add value, but also make the transition and transfer of clients and agency information much smoother. In general, buyers are looking for areas that are going to slow down the transition process and potentially cause some roadblocks in the future. Having a robust technology platform will enhance the value of the agency.

During the acquisition process, potential buyers will conduct due diligence to analyze the agency and determine the value. It is vital that principals nearing retirement age understand the factors that will bring buyers to the table, and the factors that will deter buyers.

Finding areas to add value to your agency can bring thousands of dollars to the table. Owners work 30 years or more to manage and grow their agency, and often times sell their biggest financial asset without the necessary guidance, time, and effort it takes to be done right. With the help of the advisors at IA Valuation, we can help you plan your exit from the industry with peace of mind and compensation to help you enjoy retirement. To discuss these factors and get started today, please reach out to Luke at

About IA Valuations and Agency Link – Founded in 2017, the IA Valuations team has performed over 220 valuations to independent insurance agencies across the U.S. Our advisors have 25+ years of experience guiding agency owners on maximizing their agency value, planning, and legal needs for ownership transition. In addition, IA Valuations has provided perpetuation planning, financial modeling and business planning for independent insurance agencies. Finally, IA Valuations has advised dozens of agency owners on selling their agencies through our Agency Link process. Agency Link is a platform that connects buyers and sellers together to further the growth and strength of the IA system. To learn more about IA Valuations, please visit or

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 to discuss your personal situation.

Copyright ©2023 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. 

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