Many Agencies that specialize in Personal Lines Insurance Coverage are trying to break into the Commercial Insurance Market. A few challenges when breaking into Commercial is learning all the coverage’s, forms, terminology, marketing to businesses and obtaining competitive carriers. Continue reading "Personal Lines Agencies that want to write Commercial Insurance should find a Niche"

Most agency owners will sell an insurance agency once in their lifetime. Many insurance agency buyers have purchased more than one and have more experience with the process. Because of this experience, buyers have an advantage when it comes to negotiating the sale of your Personal, Commercial, Health or other Insurance Brokerage. Continue reading "When Selling an Insurance Agency Have a Team of Pros Working for you"

Property and Casualty rates are down and Insurance Agency Buyers see that as an opportunity.  Buyers believe that if they can acquire a $250,000 commercial insurance book and keep 80-90% of it intact, when rates go back up that same book should generate closer to $300,000.  Continue reading "It’s a Soft Market and Insurance Agency Buyers Know It"

Abram Interstate Insurance Services Inc. in Rocklin, Calif., is offering coverage for hard-to-place homeowners and dwelling fire risks in Arizona and California. The company will write older homes with no updates, homes in brush areas, homes in protection classes 9 and 10, seasonal and vacation rentals, vacant homes, homes with woodstoves, homes with wood and flat roofs, homes on fuses, mobile homes and log homes. Coverage is available for course of construction including owner builder. Continue reading "Homeowners Market for California and Arizona Insurance Brokers"

As the 1st quarter of 2009 comes to a close and tax season is in full swing, it’s a great time to clean up your agency’s financial records. Forming a plan and getting started is the biggest challenge but once you dig in, you can add tons of value to your business and manage your agency more effectively. Insurance Agencies don’t have cash registers or invoices, we have commission statements and this is the first thing you should start organizing. Continue reading "As the 1st Quarter Comes to a Close get Your Insurance Agency Organized"

Most of the calls from prospective insurance agency sellers start with, “What are agencies selling for these days?” or “What kind of multiple can I expect if I sell my agency?” Continue reading "What is your Insurance Agency Worth?"

Locating an insurance agency for sale can create more challenges than buyers and sellers realize. Once you locate an insurance agency for sale, what are the next steps? Sign confidentiality agreements, learn as much as you can about the agency, interview the seller of the agency, visit the location, request documentation about the agency, submit and negotiate an offer, request due diligence material, conduct due diligence,  negotiate and prepare a purchase agreement, locate financing, and finally close the deal. Continue reading "There are Many Steps to Buying or Selling an Insurance Agency"

When listing an insurance agency for sale, you’ll be approached by buyers asking for a variety of information. One of the items they’ll ask for is an income and expense statement and/or commission statements for the past 3-5 years. When you show this information to a buyer is up to you, but at some point, they’ll require these documents in order to close. Continue reading "Verifying Income is a Challenge when Buying or Selling an Insurance Agency"

Despite the bad economy, soft market and freeze in lending, Insurance Agencies for sale are still in demand. If you have a profitable agency and are looking to sell it, there are plenty of buyers in this market. While most Main Street businesses are struggling to stay afloat let alone sell, Insurance Agencies remain in demand because of the renewal revenue stream they provide. Continue reading "Selling your Insurance Agency or Brokerage in 2009"

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.