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Independent insurance agencies face pressure to operate efficiently while maintaining growth and profitability. As industry complexities accelerate and operational costs rise, agency owners are exploring innovative and alternative ideas in order to increase operational efficiencies and profitability.
One example is Virtual Assistants (VAs) who live outside of the US but work as part of your team. The idea is that repetitive tasks, such as remarketing, entering data, ect, tasks that a license is not required for, can be handed off to outsourced talent, while licensed employees can spend more time generating revenue or creating deeper relationships. The conversation around VAs often focuses on cost reduction, missing the bigger opportunity.
Agencies that only focus on cost savings are missing the larger picture.
- Performance and Growth - Freeing local talent to focus on business development and client expansion
- Performance and Retention - Maintaining service quality while optimizing operational efficiency
- Performance and Profitability - Maximizing margins through strategic task allocation
The key is thinking about human resources differently and identifying which tasks can be effectively outsourced to create capacity for higher-value activities. As this trend rises, the industry has been asking themselves, do Virtual Assistants actually deliver measurable bottom-line results? This study examines real agency valuation data to determine whether VA adoption translates into higher agency values, improved profitability, and better overall financial performance.
About the Study
AgencyFocus analyzed comprehensive valuation reports from eight independent insurance agencies to identify patterns between VA usage and financial performance. The dataset includes:
- 8 Agencies randomly selected who declared they do, or do not use VA’s in their agency at the time of their fair market valuation report.
- Valuations conducted using consistent Multiple of Pro Forma EBITDA methodology
This data was used to create a controlled comparison across similar-sized agencies, providing clear insights into VA impact on agency valuation and performance.
Findings
Performance Advantage: VA Agencies Lead in Key Metrics
Detailed Performance Analysis
Growth Impact: VA agencies demonstrate superior growth momentum, averaging 13.1% annually, 34% higher than non-VA agencies at 9.8%. This performance puts VA agencies well above industry benchmarks and suggests effective resource allocation toward business development activities.
Efficiency Impact: The profitability story is even more compelling. Agencies who utilize VA’s achieve 20.8% average profitability compared to 16.6% for traditional agencies, a 25% improvement. Three of four VA agencies exceeded the 17.4% threshold that AgencyFocus considers "strong performance," compared to only one traditional agency.
Market Recognition Impact: Perhaps most telling, VA agencies command higher EBITDA multiples (8.0 vs. 7.6), indicating that buyers recognize and pay premiums for the operational efficiency and scalability that VAs enable. This 5% multiple can translate to significant additional valuation dollars.
Payroll Efficiency Analysis:
- VA agencies: 45.3% average payroll as percentage of revenue
- Non-VA agencies: 48.9% average payroll as percentage of revenue
- VA agencies operate 7.4% more efficiently on payroll costs
Benefits Optimization:
- VA agencies: 5.8% average benefits as percentage of revenue
- Non-VA agencies: 6.2% average benefits as percentage of revenue
- VA agencies show marginally better benefits efficiency
Revenue per Employee Productivity:
- VA agencies: $200,928 average revenue per employee
- Non-VA agencies: $183,375 average revenue per employee
- VA agencies generate 9.6% more revenue per employee
Insights
Understanding the VA Performance Story
The Efficiency Model: VA agencies demonstrate superior profitability and operational efficiency metrics, revealing the power of strategic task allocation. When administrative burdens shift to VAs, local talent can focus on relationship building, sales activities, and strategic client management, the high-value work that drives both growth and retention.
Resource Reallocation Success: The superior profitability and growth rates suggest successful task stratification between virtual and local resources, enabling agencies to maximize the impact of their most expensive team members.
Market Recognition of Scalability: The higher EBITDA multiples (8.0 vs. 7.6) indicate that buyers recognize and value the operational infrastructure that VAs represent. They're not just seeing cost savings; they're seeing scalable business models that can grow efficiently.
Operational Excellence Themes
Service Quality Maintenance: VA agencies maintain competitive service levels while achieving superior operational efficiency, demonstrating that Virtual Assistants don't compromise client experience when properly integrated.
Human Resource Optimization: VA agencies show measurably better payroll efficiency (45.3% vs. 48.9% of revenue), suggesting successful task stratification that reduces local staffing costs without sacrificing productivity.
Productivity Enhancement: The 9.6% higher revenue per employee among VA agencies indicates that Virtual Assistants effectively amplify the productivity of local team members by handling routine tasks and freeing up capacity for revenue-generating activities.
Valuation Impact
Detailed Valuation Analysis
VA Agency Valuations:
- Range: $2,007,020 to $4,501,547
- Average: $3,348,006
Non-VA Agency Valuations:
- Range: $493,911 to $5,095,261
- Average: $3,370,473
Key Valuation Drivers
EBITDA Multiple Enhancement: VA agencies earned an average 5.3% premium on EBITDA multiples, reflecting market recognition of their operational efficiency and scalability potential.
Profitability Premium: The 25% higher profitability rates translate directly to higher absolute EBITDA in many cases, creating a compounding effect on valuations.
Growth Story Value: Buyers pay premiums for agencies demonstrating consistent above-market growth rates, which VA agencies clearly deliver.
Study Limitations and Implementation Reality
Critical Caveat: Having VAs is Just Step One
This study measures agencies that have taken the important first step of adding Virtual Assistants to their teams. However, the data reveals a crucial limitation: simply hiring a VA does not automatically improve business performance. The wide variation in results among VA agencies (valuations ranging from $2.0M to $4.5M) demonstrates that implementation and strategic utilization are everything.
The VA Success Formula Requires:
- Strategic Task Stratification - Properly identifying which responsibilities should be handled by VAs vs. local staff
- Performance Metrics and Accountability - Tracking the specific outcomes that VAs should drive
- Ongoing Optimization - Continuously refining the division of labor to maximize both VA and local team effectiveness
Why Some VA Agencies Underperform: The agencies showing weaker performance likely treat VAs as simple cost-cutting measures rather than strategic growth enablers. As with any employee that’s onboarded to your team, VA’s need proper task stratification and performance management.
The agencies showing superior performance in this study implemented VAs strategically, with clear role definitions and measurable outcomes.
Conclusion
The data presents a compelling but nuanced case for Virtual Assistant adoption in insurance agencies. While VA agencies don't automatically achieve higher absolute valuations, they demonstrate superior operational metrics when VAs are properly implemented and strategically utilized.
The VA Advantage is Real But Implementation Matters: Agencies using Virtual Assistants effectively achieve meaningfully higher profitability rates (20.8% vs. 16.6%) and growth rates (13.1% vs. 9.8%) compared to traditional agencies. However, the wide performance variation among VA agencies proves that success depends entirely on strategic implementation.
Performance Over Pure Cost Savings: The most successful VA agencies in this study likely view Virtual Assistants as performance enhancers rather than cost-cutting measures. They focus on:
- Performance and Growth through strategic task delegation
- Performance and Retention by maintaining service quality while optimizing operations
- Performance and Profitability via proper resource allocation
The Strategic Implementation Imperative: Simply adding VAs to payroll won't move the needle. Agencies need to think differently about human resources, properly stratify responsibilities, and track the metrics that matter. This requires expertise in identifying VA opportunities, measuring performance impact, and continuously optimizing task allocation.
Strategic Partners
AgencyFocus - Your Financial Partner
Through our extensive valuation work across hundreds of agencies, we've seen that agencies who strategically integrate VAs unlock stronger profitability and higher multiples. The key is proper implementation and ongoing financial oversight, which is where guidance from AgencyFocus ensures measurable results rather than expensive experiments.
AgencyVA - Your VA Partner
Agencies that partner with Agency VA unlock multiple levers to improve valuation. Our trained Virtual Assistants seamlessly take on certificates, claims, endorsements, and other service work, giving producers and account managers more capacity to focus on revenue growth. At the same time, our employee-of-record model reduces costs and removes the legal risks that come with foreign contractors, directly improving EBITDA. Together, these solutions drive measurable gains in profitability, efficiency, and valuation, which is why buyers view Agency VA, enabled agencies as stronger, safer, and more scalable.
For agency owners considering Virtual Assistants, the evidence is clear: strategically implemented VA programs can deliver significant improvements in valuation-driving metrics. The question isn't whether VAs work, it's whether you have the expertise to make them work for your specific agency.
Key Takeaways
- VA agencies achieve 25% higher profitability rates (20.8% vs. 16.6%), demonstrating clear operational efficiency gains that directly impact bottom-line results
- Growth acceleration is significant - VA agencies grow 34% faster than non-VA agencies (13.1% vs. 9.8% annually), suggesting VAs successfully free up local talent for business development activities
- Market recognizes VA value through higher multiples - VA agencies command 5.3% higher EBITDA multiples on average, indicating buyers value the scalability and efficiency of VA-supported operations
- VA success requires strategic implementation, not just hiring - The wide performance variation among VA agencies (valuations from $2.0M to $4.5M) proves that simply adding VAs to payroll doesn't guarantee results; success depends on proper task stratification and performance management
