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Insurance Broker Valuation Multiples: Q3 2024 Projections

The following report contains our projections for Q3 2024 insurance broker valuation multiples. The table below breaks down our core findings, comparing existing Q2 data taken from our SF Index to our analyst’s projections for Q3 2024. In addition, we categorize this data according to insurance industry specialization and by brokerage size, as measured by their annual revenue.


Insurance Broker Valuation Multiples: Q3 2024 Projections



Using these numbers as a baseline, let’s examine the insurance industry more closely to identify influential factors behind its specific changes. 


The Insurance Brokerage M&A Market in 2024


On average, insurance brokerages are seeing the highest valuations they’ve had in a decade. Since H1 2023, the average insurance brokerage valuation multiple has hovered around 11.6x EBITDA. The important data consists of the following points: 


  • Deal volume dropped, but not as much as you think. 2023 saw a modest drop in insurance brokerage deal volume, from 1043 in 2022 to 957 in 2023, which experts predicted would remain static as the market regrouped to begin a slow growth into 2025.  With H1 2024 numbers rivaling the heights of H1 2023, this year may get a jump on the projected EOY increase if the elevated valuations trend continues through the remainder of the year. That trend will certainly persist if the Federal Reserve follows through on its projection to lower interest rates mid-year.


  • Buyer perception has changed. Over the last several years, increasing numbers of buyers have begun seeing insurance brokers as a more stable investment because of a.) the mandatory nature of insurance in general, b.) the freedom of brokers to work with a variety of carriers, and c.) their increasingly streamlined operations, which lead to a more stable investment.


  • The use of stock nearly doubled since last year’s data. Whereas 2022 saw equity making up nearly 17.5% of payouts, this number has already grown to 33.3% as of H1 2024. We expect to see this percentage increase in 2024 but taper off well before it doubles like last year. 


  • PE firms remain the dominant buyers. Last year's data saw PE firms acting as buyers in ~90% of all transactions. While the most recent data reveals a slight decline (~87%), PE firms are expected to retain their power position within the industry, especially with a near-record high amount of dry powder (~$4T) waiting to be deployed. 


The growth that we’ve seen in the insurance brokerage sector has flown in the face of conventional wisdom; for years, M&A experts have held to the truism that valuations decrease in times of inflation. Nevertheless, valuations have increased steadily over the last two years with only minor dips, as illustrated in the graph below:


Insurance Brokerage Valuation Multiples vs. Interest Rates: 2020-2024 




Although the second half of 2024 remains uncertain, the biggest short-term question is whether the Federal Reserve will actually lower interest rates in Q3, delayed from Q2 projections. As we’ve stated earlier, interest rates have had little effect on valuation multiples listed for insurance brokerages. However, many buyers await more favorable conditions in which they’ll have more money available to spend. 


Until this happens, we expect the insurance broker M&A market to remain active but complicated. As long as buyers face higher interest rates, sellers should expect a prolonged deal process contending with complex capital structures and equity-based negotiations. 


The keys to success in 2024, then, will be patience and knowledge: sellers should only enter the market at a time when they’re thoroughly prepared for the process.


The Best Data From The Best Advisors


So how do we know all this? Because we are the best at what we do. Sica | Fletcher is the first and only boutique M&A firm that has advised on deals over $1B, making us uniquely qualified to speak on insurance broker valuation multiples at varying degrees of scale. Our data, pulled from the SF Index, tracks approximately 75% of all deals done within the sector, making the information provided in the sections above especially data-driven. 


If you are an insurance brokerage considering a future sale, the best thing you can do for yourself is speak with an advisor who knows insurance broker M&A. Sica | Fletcher’s team is the industry leader in insurance M&A, sitting at the top of the S&P Global charts for a decade. Reach out to us using the contact information below or through the contact page of this site.


About Sica | Fletcher:  Sica | Fletcher is a strategic and financial advisory firm focused exclusively on the insurance industry. Founders Michael Fletcher and Al Sica are two of the industry's leading dealmakers who have advised on over $16 billion in insurance agency and brokerage transactions since 2014. According to S&P Global, Sica | Fletcher ranked as the #1 advisor to the insurance industry for 2017-2023 YTD in terms of total deals advised on. Learn more at SicaFletcher.com.


Contact: Mike Fletcher

Managing Partner, Sica | Fletcher


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