The short answer
An insurance broking business is worth what its renewing commission and fee income is worth to a buyer once the current owner steps back. The price is usually expressed in one of two ways: as a multiple of the recurring income of a client book, or, for a licensed brokerage with its own staff, costs and Australian financial services licence (AFSL), as a multiple of normalised earnings. Both conventions appear in broker commentary and sale listings, and neither is a benchmark. What sets the price is how much income is still there a year or two after settlement. The multiples that are published mostly describe large deals or overseas markets, not a brokerage with one principal and a few staff. In Australia, AUB Group reported an enterprise value of $192 million for Pacific Indemnity, about 13 times FY23 EBIT, when it bought a 70 per cent stake in the specialist underwriting agency (completed July 2024). One deal of that scale is not a range for a small brokerage, and we have not found a credible published multiple for small Australian brokerages, so this page does not give one.
What a buyer is really paying for
IBISWorld's July 2026 report on insurance agents and brokers describes Australian industry income as primarily commissions on insurance premiums, plus fee income. What a buyer acquires is therefore a set of client relationships that come up for renewal every year, and the real question is how many will renew with the new owner. A client appoints a broker to act for them, and that appointment, not the spreadsheet, is the asset. The office, the broking platform and the brand can all be replaced; the renewal calendar cannot. A book where several people know each major client is a different asset from one held together by the principal's memory. The market value standard that applies for tax and other formal purposes, the willing but not anxious buyer and seller of Spencer v Commonwealth (1907), reflected in the ATO's 'Market valuation for tax purposes' guidance, asks what a knowledgeable buyer would pay. A knowledgeable buyer of a brokerage prices the income they expect to keep, not the income the seller reports.
The premium cycle: income that grows without new clients
Commission is a percentage of premium, so when insurers lift premiums a broker's income rises even if it wins no new client. AUB Group reported in November 2025 that premium rates in its Australian broking business rose 5 to 7 per cent in the first quarter of its 2026 financial year, and for the full year reported average commission and fee income per client up 6.5 per cent. Steadfast's FY26 result showed organic growth of 2.7 per cent in Australasian broking EBITA, and its guidance assumed Australian premium pricing rising only 2 to 3 per cent (Insurance Business, August 2026). Part of that income growth is rate, not new clients, and it may slow as rate growth does. A valuer splits income growth into rate, client and policy count, and new business written, and asks which will persist under a new owner. Other income lines move with conditions too: AUB Group's FY26 result noted that premium funding interest income fell 11.6 per cent as the interest rate tailwind reversed. Interest-linked income, insurer volume bonuses and any profit-related payments are tested line by line, and counted in maintainable earnings only to the extent the history shows they recur.
Retention and concentration: the assumption the price rests on
Renewal retention is where most brokerage valuations are won or lost, and it has to be measured, not asserted. Retention by client count, by policy count and by income are three different numbers: a brokerage can keep nearly all its clients and still lose income if the larger accounts leave. The reasons matter. A client who leaves on price or service is a different signal from an insurer withdrawing from a class, a client that closes or is sold, or a relationship that was the departing principal's own. Concentration is the second test: income that depends on a few clients, a few insurers or one niche class means a single decision outside the brokerage's control can remove a large part of the earnings. The evidence that does the work:
- ·A policy-level income report from the broking platform, reconciled to the financial statements and to insurer statements
- ·Retention for at least three years by client count, policy count and income, with every loss classified by reason
- ·Income by client, insurer and class, showing the largest clients and the largest insurers as a share of the total
- ·Income split into insurer-paid commission, client-paid fees, premium funding and interest income, and any volume or profit-related payments, each with its own history
- ·Who holds each major relationship, and what happens to it if the principal leaves
- ·How each client's appointment of the broker is documented, and whether it passes to a buyer
- ·New business written each year and where it came from, kept separate from renewals
A brokerage, a book, a representative practice or an underwriting agency
These are different assets, priced on different evidence. In a book sale the client relationships move into the buyer's existing licence: the buyer acquires income, not a company, so it does not inherit the seller's history, and the price depends on how much income actually transfers. In a share sale of a licensed brokerage the buyer acquires the company with its AFSL, staff, systems and trust account, and everything the company has done. An authorised representative practice operates under another licensee's AFSL, so that licensee's terms sit over the sale. Network membership, such as with Steadfast or AUB Group, may add consent, pre-emption or exit-pricing terms. An underwriting agency is a different business again. A Hamilton Locke licensing guide (June 2025) describes an agency as an agent authorised by an insurer to bind cover and in some cases handle claims, under a delegated authority or binder agreement that lets it issue contracts of insurance as the insurer's agent. A broker acts for the client; an agency acts for the insurer. The value of an agency therefore sits in the binder: its term, how the insurer can vary or end it, capacity limits, the insurer's loss experience under it, and how much premium comes from a few distributing brokers. The Pacific Indemnity deal shows the structure this produces: AUB agreed to pay $105 million upfront, with the balance due 18 months later on a sliding scale tied to 2024-25 performance. Where a broker also owns an agency, the conflict between acting for clients and earning on the insurer side must be managed and disclosed (the draft revised Insurance Brokers Code aligns its conflicts obligations to ASIC Regulatory Guide 181).
Licence, insurance, client money and conduct: the standing risks
Anyone carrying on a financial services business must hold an AFS licence unless exempt or authorised as a representative of a licensee (ASIC), and doing so without one is an offence under section 911A of the Corporations Act 2001. An AFSL cannot simply be transferred to another entity, so a buyer either moves the book into its own licence or buys the company that holds it. Buying the company brings its past with it: liabilities from events before the sale remain the company's (Hall & Wilcox, 2021), and ASIC requires the licensee to notify it of the change in control. Professional indemnity insurance is the next standing item. Under section 912B of the Corporations Act, licensees must have arrangements to compensate retail clients, in practice PI insurance under regulation 7.6.02AAA of the Corporations Regulations 2001. ASIC's Regulatory Guide 126 (November 2024) says it does not currently require automatic run-off cover, so buyers and sellers should establish what cover will respond to advice given before settlement, and what claims and circumstances have been notified. ASIC describes a client money account under section 981B as generally operated as a trust account, with the funds held on trust for the persons entitled to them. Premiums and claims money in that account are held for clients and insurers, not the owner, so they add nothing to the price, and premium debtors and creditors belong in the working capital discussion. On conduct, brokers subscribe to the Insurance Brokers Code of Practice, published by NIBA. Consultation on a revised Code closed on 7 August 2026 and NIBA is targeting 1 January 2027 for the final version, with dollar disclosure of remuneration on request among the proposals (Insurance Business, August 2026). A valuer asks whether commission and fee pricing will hold at renewal if disclosure tightens, and reads the complaints history, including any with the Australian Financial Complaints Authority.
A worked example: normalising one brokerage
Consider a hypothetical licensed general insurance brokerage with its own AFSL, one principal and three staff. Reported income is $1,150,000: $900,000 of insurer-paid commission, $150,000 of client-paid fees, $60,000 of premium funding and interest income, and a $40,000 insurer volume bonus. Operating costs before the principal's pay are $630,000 and the principal draws $100,000, so reported EBITDA is $420,000. Normalisation takes three steps. The volume bonus was paid in only one of the last three years, so it comes out ($40,000). Interest-linked income is reset to $40,000 because it moves with the cash rate, a $20,000 reduction. The principal's $100,000 is added back and a market-rate replacement manager costing $150,000 is charged. Maintainable income is $1,090,000, earnings before the principal's pay are $460,000, and normalised EBITDA is $310,000. At an assumed multiple of 5.0 times for illustration, $310,000 supports a value of $1,550,000. But the retention evidence shows the largest accounts are held personally by the principal, and the buyer's base case is that 5 per cent of income, or $54,500, does not renew after handover. The staff remain, so costs do not fall: normalised EBITDA becomes $255,500 and the same multiple gives $1,277,500. One retention assumption moves the value by $272,500, about 18 per cent, a larger swing than any normalisation adjustment. The $380,000 in the trust account at balance date adds nothing to either figure. Every number here is illustrative, not a benchmark: the shape of the analysis is what matters.
What a defensible broking valuation file contains
The conclusion is a supportable range with the most supportable position concluded within it, and the file that defends it typically contains:
- ·Three to five years of financial statements and year-to-date trading, reconciled to the broking platform's income reports and to insurer statements
- ·A normalisation schedule with evidence for each adjustment: the principal's market wage first, then volume bonuses, interest-linked income and one-offs
- ·Retention history by client, policy and income with losses classified by reason, the concentration tables, and a rate-versus-volume analysis of income growth
- ·The AFSL and its authorisations (or the authorised representative agreement), and the PI policy with its claims and notifications history
- ·Trust account reconciliations and premium debtor and creditor ageing
- ·Network, insurer and, for an agency, binder agreements: term, termination, capacity, consent and exit clauses
- ·Complaints and Code history, and comparable transactions with settled prices and terms, including any price deferred against retained income, with sensitivity across the multiple and retention assumptions
When the number has consequences
A self-assessment using this framework is often enough for early thinking. A formal valuation becomes worth commissioning once the number has consequences someone else can test: a sale or succession, whether to a network, a consolidator or an internal buyer; a partner exit or buy-sell agreement; a family law property matter where the brokerage is an asset; a shareholder dispute; or a CGT event, including small business CGT concession claims under Division 152 of the ITAA 1997, where eligibility can turn on documented market values and the $6 million maximum net asset value test. Oliver Group prepares independent valuations only. We are not a tax agent and do not give tax, legal or financial advice; your accountant and lawyer apply the valuation in their own fields. Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $10 million, and a Large Business / Start-Up Valuation is $3,495 + GST for turnover over $10 million or for a start-up. A small-business draft is delivered in 2 business days and a medium-business draft in 3 business days; the delivery date for a Large Business / Start-Up Valuation is agreed before commencement. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before work begins and never depends on the concluded value.