How to sell an insurance brokerage in Canada: the book, the earnings and the licence

Insurance brokerages in Canada are priced two ways: at 4.0 to 6.5 times adjusted earnings, or at roughly two to three times annual commission income for the book of business. Retention, the share of premium that renews each year, decides how much of either figure a buyer will pay. Carrier contracts and the Principal Broker role then shape the deal.

Two ways a brokerage is priced

Owners who want to sell an insurance brokerage in Canada meet two prices for the same firm. One is a multiple of adjusted earnings, which for financial services runs 4.0 to 6.5 times in the table of multiples by industry. The other is a multiple of the book of business, the renewing commission income the brokerage earns from its clients.

The valuation we run notes that practices in this sector are just as often priced on the book, at roughly two to three times annual commission income. Buyers will quote whichever of the two suits them, so it pays to work out both before anyone opens with one. Adjusted earnings are profit with the owner’s salary and personal costs added back, explained in SDE or EBITDA. Small accounting practices are priced the same two ways, on fees and on earnings.

One brokerage, priced both ways

Take, as an illustration, a general insurance brokerage with $2,000,000 of annual commission income and $720,000 of adjusted earnings.

A buyer who opens with the earnings figure and a seller who thinks in book multiples can sit more than a million dollars apart while describing the same firm. The book figure favours a seller with a thin margin, since it ignores costs. The earnings figure favours a seller whose margin is wide.

Our engine adds 0.3 where most revenue repeats and 0.15 where the largest customer is under 10 percent of revenue. One large commercial account pulls the other way, by 0.35 once it passes 30 percent, the risk covered in customer concentration.

Retention is what the book is worth

A book is worth the renewals it will produce after you leave. Retention, the share of last year’s premium that renews this year, is the number a buyer tests hardest.

Take the same $2,000,000 book and set new sales aside. At 90 percent retention it earns about $1.46 million in the third year after closing, and at 80 percent about $1.02 million. Ten points of retention move that year’s income by more than $400,000, which is why buyers ask for retention by producer and by line of business over several years.

Much of that retention rests with the people who service the accounts. Where you hold the largest commercial relationships yourself, the buyer is pricing your departure, the problem covered in selling a business that depends on you. A buyer may also tie part of the price to renewals after closing through an earnout.

Commissions, fees and carrier contracts

Buyers separate the income by kind. Base commission, the percentage of each premium an insurer pays the brokerage, is the core of the book. Contingent commission, paid when the book’s claims stay low, moves from year to year, and buyers usually average it or discount it.

Fees charged to clients directly are a further stream. A buyer will want them on their own line, so the book multiple applies to commission alone.

The brokerage’s right to place business comes from its contracts with insurers, often called carrier contracts. A buyer reads each one for a clause on change of control, since an insurer may review the contract when the brokerage changes hands. A book spread across several insurers gives a buyer more room than one placed mostly with a single carrier.

Licensing of the brokerage and its Principal Broker

In Ontario, general insurance brokers and their firms are licensed by the Registered Insurance Brokers of Ontario. A firm licence runs from October 1 to September 30 and is renewed each year. The renewal asks whether any change in ownership, including a share or asset purchase, has gone unreported.

Each firm has a Principal Broker responsible to RIBO. Its notice on brokerage ownership changes says that when a firm is sold, the current Principal Broker stays responsible until RIBO has been told a new one is appointed. The firm also notifies RIBO of any change in who owns or directs it.

Changing the Principal Broker takes a signed undertaking from the new one and a resignation letter from the outgoing one, stating whether they leave the firm or stay as an employee. If you are the Principal Broker, a buyer will want your successor named before closing.

This section covers Ontario’s general insurance brokers. Life agents, and brokers in other provinces, answer to other regulators, so check with yours. The guide to selling a business in Ontario covers the rest of the provincial process.

Who buys insurance brokerages in Canada

Consolidators, firms that grow by buying brokerages and are often backed by private equity, bid regularly. Navacord, backed by Madison Dearborn Partners since 2018, announced in July 2026 that Steers Insurance of Newfoundland and Labrador had joined it, its seventh transaction of the year. Navacord said a number of Steers colleagues would become shareholders in Navacord.

An offer that pays part of the price in the buyer’s shares needs those shares valued apart from the cash. Brokerages in your own region are the other natural buyers, since your clients cost them less to serve, and who buys Canadian businesses compares the groups. In a share sale, qualifying shares can use the lifetime capital gains exemption, $1,275,000 in 2026.

What to prepare before you sell

1. 01Report commission income by insurer and by line of business for three years, with base and contingent commission on separate lines.
2. 02Calculate retention each year the way a buyer will, on premium and on client count.
3. 03Collect every carrier contract and mark the clauses on change of control.
4. 04Put producer agreements in writing, with terms on client relationships if a producer leaves.
5. 05Name the person who will take over as Principal Broker if that role is yours today.

Work out the book figure and the earnings figure for your own firm before a buyer does. The Quick AI valuation gives an early earnings range in a few minutes, before you give anyone your name. When an offer arrives, the offer reader among our AI tools sets out its terms.

The buyers, due diligence priorities and sector requirements are set out on InvestDeal’s insurance and wealth practice M&A advisory page.

Questions owners ask

How is an insurance book of business valued in Canada?

Often at roughly two to three times annual commission income, with retention moving the result within that range. A $2,000,000 book would fall between $4 million and $6 million on that basis. Buyers also price on adjusted earnings, at 4.0 to 6.5 times, and may quote whichever suits them.

Why does retention matter so much when selling a brokerage?

The book is worth the renewals it produces after you leave. On a $2,000,000 book with new sales set aside, 90 percent retention leaves about $1.46 million of income in the third year, while 80 percent leaves about $1.02 million. Buyers therefore test retention by producer and by line.

What does RIBO require when an Ontario brokerage is sold?

RIBO asks to be told of changes in who owns or directs the firm, and the current Principal Broker stays responsible until RIBO has been told a new one is appointed. The new Principal Broker signs an undertaking, and the annual firm renewal asks about any ownership change still unreported.

Who buys insurance brokerages in Canada?

Consolidators backed by private equity bid regularly, alongside other brokerages in the same region. Navacord, backed by Madison Dearborn Partners, announced in July 2026 that Steers Insurance of Newfoundland and Labrador had joined it as its seventh transaction of the year.