One of the toughest challenges we face on a daily basis is the ability to verify  income of an insurance agency for sale. Insurance Agency Owners have a good idea how much each carrier pays them monthly but lack the paper trail buyers need. We have various posts on this very topic and it’s important for sellers to organize their accounting in order to sell their insurance agency. Continue reading "Add Value to your Insurance Agency by being Prepared before you Sell"

Aon reported they’ve completed the sale of Auto Insurance Specialists to Mercury General Corp.

Chicago-based insurance broker Aon Corp. has completed the sale of AIS Management, LLC, which is the parent company of Auto Insurance Specialists, LLC, to Mercury General Corp.

Aon said it received $120 million in cash at the closing on Jan. 2, and may receive potential earn out of up to $34.7 million in additional consideration payable over the two year period following the transaction closing date.

You can read the full article in the Insurance Journal here.

We’ve discussed numerous times that the main reason an insurance agency doesn’t sell is the sellers overestimate of their offering. Sellers often try to assess the value of their agency the same way they assess their home. Homes or any real property have a constant value including the worthiness of the land. You don’t have to do anything to a home in order for it to increase in value.

When a buyer looks at your Insurance Brokerage and determines the risk/reward factors hopefully they’ll see solid profits, a list of faithful clientele and happy customers. Most buyers will also review the downside which is; without your guidance and the work of your skilled employees, they’ll lose most of the customers and will have an office full of equipment and inventory.

If a homeowner moves out of their house it will maintain its value. Not so with a business. Insurance Agencies will ultimately sell for what the market is willing to pay for it. A few factors that affect the sale of Insurance Agencies include:

• Profits and Revenue past 3-5 years
• Retention
• Building/Office Lease
• Dependence on Key Employees
• Financing
• Other Assets

Before listing your agency for sale, make sure you look at all of the variables involved before determining a price. Put yourself in the buyers position and see if it makes sense to pay X amount of money for your agency with the terms you’re asking. If a buyer can’t make a reasonable living while covering all the debt the business incurs, chances are you’ll have a hard time selling your business.

Selling an insurance agency is not like selling a home or commercial building. There’s no magic formula for determining the value of an insurance agency - every agency is unique. An insurance agency is a business and the financial performance of the agency will make up 90% of its value. There are 2 formulas most buyers use to determine what they’ll pay for an agency. Continue reading "Determining the Value of Your Insurance Agency"

Most Insurance Agency Owners are savvy business people and when it comes to selling their agency, decide  to do it themselves. Many Business Owners would never consider selling their house without a Realtor and they’ve lived in houses longer than they’ve owned a business. The thing about selling a business is there’s no uniformity when selling a business. Every insurance agency is different and every agency needs attention in different areas. Continue reading "Use a Business Broker when selling your Insurance Agency"

With a New Year upon us, many insurance agency owners are hoping to sell their agencies this year. Regardless of the bad economy, Insurance Agencies are still in demand and there is no shortage of buyers. There are a few things to remember when selling your insurance agency but your number one priority is preparation. Continue reading "Selling your Commercial or Personal Insurance Agency"

After you’ve invested years and/or decades into your insurance agency you finally decide to sell. You want to get out and not worry about who shows up and who doesn’t. You want to be rewarded in one lump sum for the years you’ve invested in your insurance agency. There are plenty of buyers in this market. Continue reading "Experience Helps when Selling an Insurance Agency"

Most agency owners will sell an insurance agency once in their lifetime. Many insurance agency buyers have purchased more than one, have more experience with the process and have an advantage when it comes to negotiating. When selling your agency you need to assemble a team consisting of your CPA, Attorney and Insurance Agency Consultant or Business Broker. Each person plays a vital role in the process. This post will discuss the CPA’s role in the selling process. Continue reading "When Selling your Insurance Agency Consult your CPA"

If you own a preferred book of business and are considering selling it in the next six months, we have buyers ready, willing and able to buy your agency. The demand for insurance agencies hasn’t waned in spite of the economic turmoil we’re in. It’s harder to borrow money to buy an agency, but many of our buyers are capitalized and can offer excellent terms with a quick no hassle close. Continue reading "Mercury, Safeco and other Preferred Insurance Agencies"

It’s a fact that 70% of businesses sold have some form of seller financing. Most sellers want a full cash payment which is understandable. There’s absolutely nothing wrong with selling a business and asking all cash. Continue reading "Seller Financing is the Best way to ensure your Agency is Sold"