This more complex approach calculates the present value of expected future earnings, adjusted for risks like potential client attrition. 2. Essential Due Diligence Buying an Insurance Book of Business 101 - SmartFinancial
The most common approach for smaller books ($500,000 or less). The book is valued at 1.0x to 3.0x its annual gross revenue or commissions. buying an insurance agency book of business
This method focuses on profitability (Earnings Before Interest, Taxes, Depreciation, and Amortization). Multipliers typically range from 4x to 9x EBITDA . This more complex approach calculates the present value