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EBITDA Multiples for Insurance Companies – 2024 Report

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Last Updated: March 28, 2024

The report below contains the results of our recent analysis of EBITDA and revenue multiples for private insurance companies as of Q2 2024. The data used in this analysis was sourced from proprietary M&A databases, interviews with insurance M&A firms, and private equity networks (Sources) in the 18 months trailing its publish date.

The results of our study are shown in the EBITDA and revenue tables below. We have subdivided the data by insurance industry vertical and EBITDA/revenue value range. 

EBITDA Multiples for Private Insurance Companies, Q2 2024

Company TypeEBITDA Range
Malpractice/professional liability7.2x8.8x9.7x

Revenue Multiples for Private Insurance Companies, Q2 2024

Company TypeRevenue Range
Malpractice/professional liability3x3.2x3.4x

The following sections discuss current trends and challenges in the insurance M&A market as of Q2 2024. Our reserarch team also included predictions of where we see the market going next.

The State of Insurance Company M&A in Q2 2024

The insurance M&A sector saw slowdowns for larger companies in 2023, with deal volume dropping as much as 34% due to macroeconomic turbulence stemming from rising interest rates. While there were fewer “megadeals,” smaller companies saw relatively modest impact in deal volume, suggesting that acquirers were more hesitant to pick up larger ($100M+ revenue) companies. 

Despite declines in deal volume, we saw a consistent YoY increase in multiples in 2023, and that looks to be the trend in H1 2024 as well. Of all the subsectors analyzed, professional liability and insurtech were the highest performers. Our team attributes the performance of these verticals to reliable recurring revenues over the past 5 years associated with them being mostly business-facing. These verticals still saw an ~18% drop in deal volume in 2023 because of the economic downturn, but as of the start of Q2 2024, there have already been more than a dozen private company deals. 

The graph below plots EBITDA multiples for private insurance companies from H1 2020 to H1 2024.

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EBITDA Multiples for Private Insurance Companies, H1 2020-H1 2024

Consumer-facing insurance verticals saw more severe peaks and valleys in 2022 and 2023, with drops in deal volume exceeding 27% from 2022 to 2023. The causes of this volatility were rising claims costs as a result of tighter regulatory and transparency requirements, as well as increased fraudulent activity over the last year. In 2024, M&A deal volume among consumer insurance businesses has recovered slightly.

Based on the current M&A environment, our team has the following predictions: 

  • Activity will remain slower until interest rates decline in H2 2024. While smaller insurance companies aren’t feeling the slowdown as much as larger ones are, the overall trend for most insurance M&A advisors is lower deal volume, which runs concurrently with rising interest rates. We expect volume to increase as interest rates decrease in late 2024 to 2025.
  • Underperforming sectors may see M&A opportunities as add-on deals. Acquirers are likely to begin roll-ups of smaller insurance companies in various consumer-facing verticals (e.g., life, auto, health) in the coming 2-3 quarters. Some larger PE firms are attempting to emulate the “bundling” business model of larger insurers like Allstate or Progressive. In this scenario, best-in-class smaller companies may see considerably higher multiples than usual given their strategic value.
  • The 2024-2025 market will present opportunities for those who are prepared. Financial and strategic buyers are currently sitting on a record-high amount of “dry powder,” waiting until the interest rates ease. Serious company owners will want to begin a relationship with an M&A advisor 6-12 months before they hope to sell in order to ensure a smooth deal process.
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Selling Your Insurance Company

I hope this report adds some transparency to the opaque process of preparing your company for an M&A process. I’ve sold several businesses to both financial and strategic buyers, and wasn’t able to find much reliable data during the initial information-gathering stages.  

If you have any other questions, I’m happy to provide a third-party opinion. You can reach me at the link below or through the contact page on this site.

Evan Bailyn

Evan Bailyn is a best-selling author and award-winning speaker on the subjects of SEO and thought leadership. Contact Evan here.

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