While selling to one of the many active buyers of independent insurance agencies may be a great financial move for owners, many of these transactions are wrought with unanticipated issues for both parties.
Obviously, not all of them end with tales of woe, but many do carry the weight of frustration for brokers and/or their teams. Many of the issues are largely avoidable, but either way, it's imporant to know what you're getting into before taking the plunge.
Here are five things brokers should know about agency acqusitions.
|1. Agency owners usually consider selling because there is an underlying problem.
Something is broken in their agency and the owners are unsure of how to fix it. If things had been truly going well — consistent organic growth, healthy profit margins, etc. — the agency likely would have never sold.
2. Volume with carriers isn't the real challenge for most agencies.
The real challenges are leadership's inability to successfully manage the agency by fostering a healthy culture, evolving the value proposition, and instilling the discipline necessary to achieve growth in the first place.
3. Acquiring agencies are selling the selling agency on why they should sell.
If you go into an acquisition because you’re flattered someone is interested and wooing you, stop right now. These are salespeople looking to make a sale and virtually any business is attractive.
4. Promises are often made as part of the selling process.
You’ll hear how everyone gets to keep their jobs and no one will really notice any difference, but this is hardly ever the case. It may remain that way for a while, but then things begin to change. They have to.
5. For a successful acquisition/merger, egos must be set aside and control must shift. 
Consistent, mandated expectations must be in place for each new office: goal setting, planning, CRM, value proposition, processes, etc. This consistency frees up offices and producers to do what they do really well: sell.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
