Given the massive number of M&A transactions in the IA system over the past decade, it has created an abundance of misinformation about the M&A environment for independent agency owners. In an effort to clear up some of the misconceptions, we are going to engage in a game of two truths and a lie.

Truth #1

The Independent Agency (IA) system is undergoing massive consolidation and an unprecedented wealth transfer. Macro-economic forces are causing agency owners to transition ownership every year. These forces include:

  • Aging principals: 37% of agency principals are over 61
  • Record-high agency valuations: 42% increase in 8 years
  • Billions of dollars of investments being infused into the IA system: estimated $85B invested or available for investment
  • AI-fueled technological uncertainty

According to Optis Partners, there have been 7,633 M&A agency and broker transactions since 2016. To measure the increase in M&A activity, we looked at 5-year increments; from 2013 to 2017, there were 2,161 transactions, and from 2021 to 2025, there were 4,455. That represents a 106% increase in M&A transactions over those 5-year time frames. While the M&A market has cooled off from its peak in 2021 (33% decrease), we are still in an environment with a bounty of hungry buyers and a decreasing number of sellers.

Truth #2

Agency values are at record levels. According to IA Valuations' data, the average EBITDA valuation multiple is 8.5 across all combined revenue categories, and the revenue multiple in an external sale is 3x regardless of the profile of an insurance agency. Agency values rose another 8.7% in 2025.

Agencies are realizing higher multiples in large part because of the recent revenue growth from the hard market (10.9% C&F growth), the attractiveness of the recurring revenue model for insurance agencies (average retention rates of 90%+), and the high profit margins they operate on (average 27% EBITDA profitability margin).

The Lie

The lie is that Private Equity (PE) and publicly traded brokers are responsible for the majority of the M&A transactions in the market. While it is true that PE and publicly traded brokers are responsible for the majority[CB1]  of the publicly reported transactions that make headlines in insurance trade journals, this percentage does not reflect the actual number of M&A transactions. These buyers and acquisitions get all of the attention because they are the only ones putting their M&A activity into trackable press releases and public outlets.

The truth is, the headlines are only half the story. According to IA Valuations data, 72% of ownership transitions in 2025 were between privately held retail insurance agencies, which includes a split between internal perpetuations and external sales to friendly retail agency competitors.

This should be encouraging for every aspiring agency owner and entrepreneur thinking about entering the IA space. Despite all the recent M&A activity in the past 10 years, there are still approximately 39,000 independent agencies, according to the 2024 Agency Universe Study, and retail agency ownership transitions far outnumber the PE/public broker transactions.

Whether you are planning to buy, sell, or hold, the key takeaway from this article should be to have a plan, execute the plan, and ignore the noise. Just because your agency peer is sold or is selling, does not mean that you should. Build a plan and run your own race.

(Photo credit: Shutterstock)

This article was originally published on the IAValuations blog and has been reprinted here with permission.

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