How to Value Your Insurance Agency Business

Using DCM’s Free Website Business Valuation Estimator

Moat Associates has created a business valuation tool that can be used to estimate the value an independent insurance agency, whether large or small.

Do you need a valuation estimate for legal or perpetuation planning?
Are you curious about the value of your insurance agency in today’s market?
Are you wondering about how to possibly value and price your insurance agency for sale?
Or are you thinking about buying another agency and want to get an idea of its value before planning an offer?

While free business valuation software will not take the place of an insurance valuation expert, it can give you a good general idea of what your business is worth. This business valuation calculator is designed as a research tool only to provide insurance agency business owners with a free and confidential instant business valuation result that can be used to help determine an approximate valuation. This business valuation calculator is designed as a self-help research tool.

Why Try Free Business Valuation Software?

Simple estimators of an Insurance Agency’s value can be useful.

Our business valuation calculator offers a simple calculator as an alternative to the 1.5 times “rule of thumb” which is regularly misapplied.
While you need not identify yourself or your agency, those who ask will receive a response that offers “indicators” for improving the value of your business.

A free and simple valuation calculator is limited and should only be used as an estimate of value. Free online services are not intended to replace a full business valuation.

Any “simple” methodology can be terribly incorrect because, of necessity, it relies on a “simple” (i.e., limited) set of data.
Hidden behind one year’s financial results are a multitude of factors that can greatly affect an agency’s real value.
Significant among mitigating factors, but far from being all inclusive, are:

i) Effect of revenue trends;

ii) Underwriting performance;

iii) Concentration of business within a few accounts or specialty lines of business;

iv) Source(s) of new sales;

v) Reliance on one or two employees;

Our Business Valuation Methods Work

Notwithstanding the above comments, our Insurance Business Valuation Estimator brings together one year’s data regarding the factors that most often have the greatest affect on an Insurance Agency’s Value.

True Size
Reasonable Owner Compensation
Efficiency
Profit Margin
Tangible Balance Sheet Values
Working Capital

The resulting business valuation estimate will reflect a general application of standard valuation methodologies to the information you submit and may change substantially based on a comprehensive review of your operations and a complete discussion of your financials. For a complete valuation of your insurance agency, please consider contacting Moat Associates.