Insurance Companies Valuation Multiples

On the insurance side embedded value is an extremely important methodology for life insurance companies.

Insurance companies valuation multiples. The valuations in a sense are a bet on the. Insurance agency valuation multiples. The outlook is that insurance companies are expected to generate great profits on the back of better product mix higher margins and customer profile. The valuations for insurance distribution firms are and have been at an unprecedented peak over the pasttwo years and the outlook remains strong.

While we are always monitoring changes to financial issues related to the p c insurance industry we have long stopped trying to predict the future especially in terms of the valuation of brokerages. Insurance agency valuation multiples. First price multiples based on the book value of equity are almost always included in the valuation section of insurance analysts reports but are uncommon in other reports. Life insurance has a much longer lifespan than property casualty p c insurance so you can often project cash flows and profits 20 30 years into the future.

To download financial data and comparable company valuation multiples at selected dates click here. Of analysts that follow insurance companies hereafter insurance analysts reports and those of other analysts. Our company performs over 10 agency valuations each month for principals buyers and lenders around the country. Users can download and retrieve underlying industry valuation multiples by sic code s or by selecting individual peer companies to create a user defined peer group.

Having said that we are in the unique position to observe brokerage transactions on a regular basis talk to the parties involved and try to make sense of the motivations behind the deals being. Multiples of ebitda earnings before interest taxes depreciation and amortization has been used for various business valuations investment decisions. Insurance valuation insight a couple of key metrics can be used to value insurance companies and these metrics happen to be common to financial firms in general. Currently the marketis priced at a50 premiumto normalmarketconditions.

There are some misconceptions in the insurance industry relating to transaction multiples paid for agencies.