Current Perspectives on Specialty Distributors
In 2015, MarshBerry launched our Insurance Specialty Distribution Survey. The Specialty Insurance Distribution space includes, but is not limited to, Managing General Agents, Managing General
Underwriters, Program Administrators (collectively “MGAs”), and Wholesale Brokers (“Wholesalers”).
One hundred and five (105) specialty insurance distributors responded to the Survey which was conducted from February to May 2015. When looking at the geographic distribution of respondents, the West region responded the most, representing 35%; East had 20%; Southwest had 17%; Southeast had 16%; while the Midwest represented 12% of the respondents.
Market conditions show a great number of buyers seeking either “platform” and/or “bolt on” acquisitions to either start an operation from the ground up or enhance their current operations.
Potential buyers who are looking for cash flow from commissions and profit sharing revenues are helping to
drive multiples of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) in purchase prices
to levels in the 8x-12x* range.
The survey also revealed that 74% of MGAs identify at least one impediment to internal perpetuation.
*Multiples are averages and do not imply that all deals fall within these parameters.
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