A few sellers we’ve spoken to recently say they want to wait until the economy improves before selling their insurance agency. Most buyers looking to buy agencies today are having a hard time finding quality books of business to buy which is why now is a great time to sell. Continue reading "Don’t Wait if you’re Considering Selling your Insurance Agency"

There may be no industry in this country experiencing consolidation at a faster pace than the insurance agency business.  Since 1990, the total number of independent insurance agencies has shrunk by more than 20%, but smaller agencies have disappeared at nearly double that rate.  So where have all the agencies gone and what does it mean for today’s agency owner?  Continue reading "The Impact of Insurance Agency Consolidation"

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.