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Valuing Your Crop Insurance Agency

Updated: May 18, 2021

What drives the maximum value of you agency? This is key because this is the type of transaction that you only do once, and you want to do it for the highest value possible.

So what does drive your agency value? Agency value is not driven by one thing, but by a combination of multiple factors. These are the 4 factors we look at most.


We hear many agents talk about how much premium volume they write. The industry as a whole has ranked agencies by volume which is the equivalent of only looking at top line revenue vs. profitability of the agency. So what's the difference? The truth is no one only buys revenue. Acquisitions are many times determined by the profitability of the agency or in essence how efficient the business is ran. Having large premium volumes will get the attention of peers and the industry, but maximizing your profitability is a key step to maximizing you value.


Retention during an acquisition is a very large component of the sale. Assisting in creating a transition plan to help maximize customer retention is key. Acquisitions that typically have extremely high values are driven by earn-outs and plans to make sure customer retention remains at 90% or higher.

Underwriting Profitability

Crop Insurance agents tend to not worry as much about their books underwriting profitability. However, agencies that are actively pursuing acquisitions can tend to put significant weight to the businesses loss history. Why is this important? Larger agencies will work hard to have a balanced book of business that historically will have a strong underwriting gain. By maintaining a historically strong UW gain this brings strength and value to the relationship between the agency and the AIP's.

Profitability, retention, and underwriting profitability are a few of the key factors for driving agency value. Follow us and keep up with ways to drive value or grow your agency.

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