Why Bigger Means Better Multiples: The Link Between Company Size and Valuation

Introduction: Why Company Size Matters in M&A Valuations

In Canada’s group benefits insurance brokerage sector, many high-performing independent firms find themselves in a tough spot. You’ve built a profitable business with loyal clients but when it comes to valuation, size matters more than ever.

Larger firms command higher EBITDA multiples because of their scale, efficiency, and market reach. As big consolidators chase bigger deals, smaller brokerages are being undervalued or overlooked, even those with strong fundamentals.

At Greater Sum Insurance Collective (GSIC), we believe there’s a smarter way to unlock full value: by growing together. We help sub-$2MM EBITDA brokerages access the same scale advantages the big firms enjoy without losing independence.

What are EBITDA Multiples and Why Do They Matter

When selling a brokerage, most owners focus on revenue or book size, but serious buyers care most about EBITDA multiples. This metric, which compares a company’s enterprise value (EV) to its earnings before interest, taxes, depreciation, and amortization (EBITDA), serves as a benchmark for assessing how valuable your business is in the market.

In Canada’s insurance brokerage space, strong firms can command EBITDA multiples ranging from 10x to 15x or higher. But reaching the upper end of that range often requires more than just solid performance. It demands scale, efficiency, and a de-risked growth story.

That’s where GSIC comes in: we help entrepreneurial firms reach the next level, enabling them to grow their multiple not just their revenue.

The Size Premium: How Larger Firms Command Higher Multiples

Larger brokerages consistently earn higher valuation multiples because size signals stability, efficiency, and scalability. Firms with $100M+ in annual premiums have been known to secure 15x–18x EBITDA while smaller firms might only see 8x–10x, regardless of their profitability.

This is what’s known as the “size premium” and it’s a clear advantage for well-capitalized platforms.

But here’s the opportunity: by teaming up through a consortium like GSIC, smaller firms can unlock those same scale-driven advantages together. You don’t need to be acquired to grow your multiple. You just need to be part of a platform designed to create shared value.

Key Drivers Behind Higher Multiples For Larger Companies

• Lower Perceived Risk

Larger brokerages are often viewed as less risky investments. They typically possess audited financial statements, a broader client base, and more stable revenue streams. This stability reduces the risk for acquirers, making these firms more appealing and justifying higher valuation multiples. For instance, larger companies often have more advanced computer systems and a greater number of customers, meaning the loss of any single client has a minimal impact on overall revenue.

• More Scalable Operations

Big firms spread fixed costs across more revenue, use advanced tech, and run leaner operations.

Our partners benefit from shared technology infrastructure, automation tools, and proven operational playbooks, giving small firms the operating efficiency of much larger players.

• Broader Market Reach & Diversification

Acquirers love diversification. A broad client base makes revenue more predictable and resilient.

Through GSIC, firms retain local ownership but expand their client reach through cross-selling opportunities and shared service offerings, helping diversify income streams without losing identity.

• Professional Management Teams

Larger brokerages typically have deep benches and succession plans, two things that de-risk an acquisition.

We help firms install lightweight governance, operational leadership, and transition planning to reduce founder dependency and strengthen long-term value.

In summary, the combination of reduced risk, operational efficiencies, market diversification, and strong leadership makes larger group benefits insurance brokerages in Canada more attractive to buyers, leading to higher EBITDA multiples.

What this Means for Insurance Brokerage Owners

If you’re a founder leading a successful but lean brokerage, you’ve likely faced the tension: the market rewards size, but growing alone is costly, risky, and time-consuming.

Without scale, your valuation may plateau even if your margins are strong. You might also lack a clear succession plan or the capacity to pursue M&A yourself.

GSIC exists to help founders like you overcome these barriers. We offer a way to grow smarter, not just bigger, by partnering with like-minded firms under a shared platform. You stay in control, gain real liquidity, and tap into the advantages of scale without being absorbed.

Unlocking Value through GSIC

GSIC isn’t just a buyer. We’re a collective of founders building value together.

We acquire 51–80% of your firm to provide immediate liquidity, but the real upside comes from shared equity in the broader platform. As GSIC grows, you benefit from the enterprise value of the entire consortium, not just your own P&L.

We bring:

• Partial liquidity

• Operational expertise across sales, tech, compliance, and automation

• A peer-led consortium structure, not a top-down acquisition

You maintain your brand and leadership, but gain the leverage of a scaled platform and a team aligned around long-term success. The result? A higher multiple, a stronger business, and a path to a bigger future exit without going it alone.