The Insurance Agency Mergers and Acquisitions Insider
This blog was designed for topical discussions relating to insurance agency mergers and acquisitions, and some best practices for managing an insurance brokerage business. We are a merger & acquisition advisory firm exclusively serving independent insurance agencies and brokerages. We are actively involved in valuations and M&A transactions across the United States for agencies with a few hundred thousand to over $10M in revenue, and we have chosen to openly share insider information for the benefit of the brokerage community.
Steps to Improve Confidentiality During the Sale of Your Agency
When it comes time to selling your agency, confidentiality is vitally important. You may be dealing with one or more buyers, each of whom will have a multitude of questions and requests and his/her own opinion of how to go about the process of acquiring your agency. The potential of [...]
Financing Agency Acquisitions – Understanding Debt Coverage
Different lenders underwrite acquisition financing a little differently; however, they all typically want to stay under 6 x EBITDA on leverage. The reasoning is fairly simple…cash flow. As we’ll see below, agencies don’t cash flow well when they leverage themselves over about 6 x EBITDA. One of lenders’ key underwriting metrics is something called the debt coverage ratio, which is a measure of the cash flow cushion over debt payments.
National Preparedness Month: Selling Opportunities
National Preparedness Month is about taking the necessary steps to prepare for natural disasters or the unforeseen emergency. When it comes to preparing for the unexpected – the first step is to check your insurance coverage. Without the proper coverage your ability to take care of family and business is [...]
Navigating the Commercial Loan Process
If you think a loan is just a loan – stop. The purpose of a commercial loan is to generate revenue, make improvements (equipment) or commence new construction development. Generally, these loans have short durations, some have balloon payments and pre-penalty fees when it comes to paying off the loan [...]
History of Insurance: Why It Matters When You’re Considering an Acquisition
It's difficult to imagine a time when insurance wasn't an integral part of managing risk for both individuals and businesses alike. But insurance has evolved over the millennia from something we would barely recognize to the products of today. To understand the current insurance industry and all of its potential, [...]
All About Agency Due Diligence
Agency due diligence means that you've taken the necessary steps to understand what you're acquiring in an agency acquisition. Any time you purchase an existing business, you're not only acquiring the good: Goodwill Lines of Business Revenues Talent Technology You're also acquiring liabilities and obligations like: Debts/Overhead Retirement packages Outdated [...]
When Not to Buy an Insurance Agency
So, you're thinking about the possibilities of owning an insurance agency. Before you make the final decision gather as much information on the prospective purchase and leave nothing to chance. Take advantage of due diligence and hire a professional - it’s a lawful discovery process for collecting information about a [...]
How to Gauge the Health of an Agency Before Buying
Internal and external economic factors contribute to the health of most organizations. Other elements playing a major role in the insurance market include commerce risks. When you consider all of the possible components affecting the well-being of an insurance agency – it still comes down to profit. Look at the [...]
What Exactly is a Merger?
Mergers are business tools used for joining resources to develop a larger share of the market by offering consolidated services or expansions into new territories. Given that the insurance industry has several types of products, it’s normal for an independent agent to join forces with another agent or agency. At [...]
3 Things to Know When Buying an Insurance Agency
Whether you’re just starting out or looking to expand an existing insurance agency – you need to talk with an industry professional. Aside from having the desire, drive and passion, you need to understand the risks, financial obligations and the time commitment involved with this investment. There are several benefits [...]
4 Tips for Managing Debt
Managing debt for any business is an essential part of growing it. Creating a thriving business with sufficient cash flow that becomes an asset is critical to controlling the company’s debt. The biggest challenge for most owners is managing the debt so that it works for the business rather than [...]
What Does Your Buying Process Look Like?
Annual revenues generated in the insurance industry are over 100 billion dollars annually. The expected growth from now to 2023 is approximately three percent each year. The key indicators confirm a healthy economy, making it a good time to expand your business through an acquisition. The possibilities are readily available [...]
The Most Critical Stage of Buying an Insurance Agency
What is the most critical stage of when buying an insurance agency? Is it obtaining financing? Is it finding the right agency to buy? Is it making sure your own books are in order? While there are indeed many important stages in the agency buying process, by far the most [...]
If you can’t Grow, it might be time to Go!
When agency revenues start to fall year-over-year, there is usually a reason. Sometimes the trend can be reversed, such as if it is tied to an economic cycle, but quite often the downward trend is unstoppable. In our experience, a steady decline in the business is typically an indicator that one or more of the agency principals are spending less time running the business. The enthusiasm and competitiveness that perhaps once drove growth in the business has waned.
3 Things to Know When Selling an Insurance Agency
If you're considering selling your insurance agency, there could be a number of reasons that prompted you to pursue this route—perhaps you're ready to retire, or maybe you've simply decided to look into other endeavors that will benefit your professional being. In any event, there's a lot to think about [...]
Why Use a Consultant to Manage Your Debt While Selling?
Having any kind of debt while you're in business can be a little nerve-wracking, even if the business is swinging from strength to strength. But it can be downright terrifying to manage if you're in the middle of selling your agency. Part of handling this process should include asking for [...]
Smart Choice Partners
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Webster Insurance AgencyAgency Brokerage Consultants served as advisor to Webster Insurance Agency
Benefits ResourcesAgency Brokerage Consultants served as advisor to Benefits Resources
PCF Insurance Services of the West
Leonard H. Franks, CPCU & AssociatesAgency Brokerage Consultants served as advisor to Leonard H. Franks, CPCU & Associates
Foundation Risk Partners
Allen & Smith Insurance, Inc. DBA St. Johns Insurance AgencyAgency Brokerage Consultants served as advisor to Allen & Smith Insurance, Inc. DBA St. Johns Insurance Agency
Extraco Banks - Commercial Insurance DivisionAgency Brokerage Consultants served as advisor to Extraco Banks - Commercial Insurance Division