Insurance brokers are in a great position right now. Learn about the latest happenings in the Insurance Brokerage space and what buyers are looking for.
Insurance brokers are in a great position right now. There is a lot of activity among Strategic Acquirers and a few Private Equity Groups that are executing aggressive roll-up strategies in this space.
With this much competition, you can only assume prices are going up. This is great news for you (considering you’re an insurance broker).
Over the last year, we have witnessed valuations go from 5-7X EBITDA to 7-9X EBITDA. If you held off on a sale last year and are considering options now, you will take home a lot more money. Good job for being patient!
So what exactly are these buyers looking for?
The most important metrics include: Annual commission revenue, Geographic location, and YoY (year-over-year) growth.
- Annual commission revenue, generally needs to exceed $500K
- YoY Growth, should be in excess of 5%
- Location is important for smaller businesses. The more rural your brokerage is located, the harder it will be for a buyer to do a deal (there is less growth potential).
How do you navigate these waters on your own?
Good news, there’s GP Partners. We happen to be partnered with many of these groups and we know what each group looks for and may pay. After all, we make a living off of closing deals, so it’s in our best interest to put you in front of the best and most qualified buyer. Since we are paid by the buyer, working with a Finder like GP Partners, is probably your best option out there.
We are here to answer any questions you may have. Give us a call or send over an email and we’ll get started.
