Why Almost Every Aggregator Deal Now Includes an Earnout
CT Acquisitions’ Insurance Agency and Broker M&A Multiples Report 2026, covering January 2024 through Q2 2026 transaction data, describes earnouts as near-universal on aggregator transactions, structured against producer retention and book retention hurdles. The same report typically prices those earnouts at 10% to 30% of headline consideration, measured over a one- to three-year window after closing, real money held back from a seller until the deal proves out.
The publisher states plainly that its figures are not appraisals, investment advice, or predictions, they describe observed deal-market ranges, which is exactly how this piece uses them: a real, current picture of what an aggregator deal looks like, not a promise of what any single deal will pay.
The Two Hurdle Types, and Why One Dominates
Per the same report, a producer retention earnout pays a seller a specified additional amount conditional on keeping specific named producers through a one- to three-year measurement period. A book retention earnout instead keys on the book itself, commonly requiring 85% to 90% client retention over the same window. A minority of deals add a third structure, a growth earnout paying extra conditional on organic growth above a specified threshold, and the report names this growth structure as clearly less common than the two retention-based ones.
That ordering matters for a selling producer weighing what an earnout asks of them. The more common structures reward keeping what already exists, the book and the people running it, while the growth earnout, when it appears, asks for something harder: new production on top of a book that just changed ownership.
What a New-Business Target Inside an Earnout Requires
A growth earnout sets a specific bar where it appears: organic growth above a stated threshold during the measurement period, meaning a selling producer is still expected to prospect and close new accounts after the sale, on top of the book they are selling. Most deals skip this structure entirely, per the same source, favoring the simpler retention hurdles above.
That distinction is worth negotiating explicitly before signing. A seller who assumes every earnout is a retention formula, stay in your seat, keep your clients happy, may be agreeing to something closer to a new hunting quota without realizing it until the measurement period is already running.
Why the Retention Number Also Moves the Purchase Price Itself
A separately sourced synthesis of M&A-advisory coverage, not independently re-confirmed by direct fetch this session and worth treating as a directionally corroborated range rather than a precision figure, reports that 90%-plus client retention after a sale earns premium pricing and a larger cash payment at close, while retention below 80% can trigger heavier earnouts and compress the deal multiple by two or more turns. Read against the earnout mechanics above, that is the same underlying lever showing up twice: the buyer is pricing in exactly how much of the book, and how much new production, survives the transition.
A seller negotiating an earnout in isolation, without connecting it to how the headline multiple itself was set, is negotiating only half the deal.
Questions Worth Asking Before Signing an Earnout Clause
Practitioner guidance: a selling producer should confirm which of the two structures, retention or growth, the earnout uses, since the report’s own data shows growth earnouts are the less common of the two and worth verifying rather than assuming. Getting the measurement window in writing, one year versus three, changes how much post-close production risk a seller carries, and a shorter window can still carry an unrealistic retention or growth bar for that shorter timeframe.
None of this replaces legal or financial advice specific to a given deal. It is a starting list of the mechanics an M&A advisory report has already made public.
Keeping New Business Moving Through a Measurement Period
A producer working under a growth earnout has a direct, dollar-relevant reason to keep new-business meetings on the calendar for the full measurement window, since the earnout clock does not stop the day the deal closes.
Human + AI SDRs can keep that new-business pipeline moving over SMS during exactly this kind of transition, so a growth-earnout measurement period does not quietly run out on an empty calendar.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- CT Acquisitions, Insurance Agency and Broker M&A Multiples Report 2026
- CT Acquisitions, Insurance Agency Valuation (2026): Book Multiples
- Ada Astra Equity, Insurance Agency Valuation & EBITDA Multiples (2026)