Standards & Guidelines For Appraising Insurance Agencies / Brokerages 2015
PREMIUMS AND DISCOUNTS
A discount or premium quantifies an adjustment to account for differences in characteristics affecting the value of the asset being valued, whether it is the agency or a book of business.
Premiums may be applied to the value of an agency or a book of business by the appraiser for . . .
Extraordinary agency location
Extraordinary company representation or benefit
Other extraordinary talent in the agency
Niche or specialty markets developed or written by the agency
Other factors that may enhance the value of an agency or book of business to others
The appraiser must use informed judgment when determining the premium to apply.
A number of factors can affect the discounts that an appraiser may apply in a particular situation. The ranges shown below are provided for guidance only and were compiled from data supplied by contributors to these Standards and Guidelines.
Deviation above or below the guideline ranges may be acceptable and appropriate, and for any given situation the discount may be as high as 100% or as low as 0%.