How Often Should You Get an Agency Valuation

Most agency owners think about valuations only when they are preparing to sell. The truth is that your valuation is a tool that helps you make confident decisions long before you ever reach that point. Your agency changes every year. The market changes every year. The risk inside your business changes every year. A valuation helps you understand what those changes mean, which direction you are moving, and how your decisions are shaping the value of the asset you are building.

Here is how to think about the right cadence and why it matters.

Why regular valuations matter

The biggest downside of avoiding regular valuations is that you simply do not know what the asset you are building is worth. When you operate without this clarity, you rely on your gut rather than facts. This creates blind spots like building risk into your agency and missing early warning signals. Many owners who wait until the year they plan to sell discover problems that could have corrected years earlier. By then, the options are limited and the impact on value can be significant.

A valuation gives you an outside, objective view of your agency. It holds up a mirror and shows you what is really driving your value and what could be holding it back.

Signs that it is time to refresh your valuation

A simple way to know is this. If you are making decisions and do not feel confident, you need to have an outside perspective that can offer you financial clarity. You should feel steady and sure when deciding where to deploy resources, how healthy your agency is, and what your next move should be. If you feel unsure or you find yourself guessing, that is a sign to get a valuation or consider fractional CFO support.

Any of the following should trigger an update:

• You are acquiring an agency or considering one
• You are preparing for an internal transition
• You are experiencing rapid growth
• You are entering or exiting a partnership
• You are joining a network or evaluating which network is right for you
• You are planning to sell in the next few years
• You completed an acquisition and want to see the true impact on value

Major decisions rely on accurate numbers. A valuation helps you anchor those decisions in reality.

How often your financials shift

Your financials shift every year. This alone is a good reason to update your valuation annually if you want a real picture of your agency’s health. Many agencies follow this yearly rhythm so they can measure progress and identify risk before it becomes a problem.

Some owners prefer a valuation every three years. This works best for agencies that are operating in a steady, predictable way without rapid growth, ownership changes, acquisitions, or major transitions.

For agencies involved in acquisitions, the cadence should be more frequent. You should have a valuation at the time of purchase and another one a year later to understand how the acquisition actually changed your agency.

What actually moves your valuation up or down

There are thirty seven risk factors that influence the value of an independent insurance agency. This includes areas far beyond revenue and profit. It includes client concentration, carrier concentration, producer dependence, growth trends, profitability trends, owner compensation, leadership age, staff age, and the presence of a perpetuation plan.

The number one reason agencies sell at a discount today is the age factor. If the owner is nearing retirement or the staff is aging and there is no perpetuation plan, the agency carries significant risk. If something happens to the owner, no one knows what will happen to the business. Buyers notice this and price it accordingly.

These risk factors are often invisible to owners because agency owners have only seen their own agency. Our team gets the privelidge to work with more than three hundred agencies every year. This gives our AgencyFocus team a far broader view of the market, what matters to buyers, and how agencies compare to each other.

So, how often should you get a valuation?

Think of your valuation as a health check. For many agencies, the right answer is once every year. For steady, slow moving agencies, every three years may be sufficient. For any agency in a season of growth, acquisitions, transitions, or planning, a yearly valuation provides the clarity needed to make confident decisions.

Your agency is one of your most valuable assets. You deserve to know what it is worth and how to protect and grow that value over time.