How Does Consolidation in the IA System Affect the Value of Your Agency?
It is undeniable that the independent agency system is undergoing massive consolidation. In what we have dubbed “the greatest wealth transfer in the history of the independent agency system,” we are experiencing a realignment of the IA business model. Over the past 10 years, according to Optis Partners, the IA system has experienced a 250% […]
The Missing Ingredient in Local Agency Acquisition Offers – Equity
The greatest competitive advantage for local, privately held retail agencies (local agencies) is becoming their greatest competitive disadvantage in the rapid consolidating IA system. As we have discussed in previous articles, mergers and acquisitions (M&A) are at record levels without any sign of significantly slowing (average of 551 M&A transactions annually in the past 10 […]
How Local Agents Can Compete with Private Equity for Acquisition Opportunities
Almost every M&A article on the IA system written in the past 10 years typically focuses on the increasing number of transactions Private Equity (PE) is responsible for. It is undeniable that PE transactions are increasing. The latest studies estimate that PE accounted for 77% of the M&A transactions in 2022.
However, what every M&A article on the IA system fails to capture and discuss is the amount of local, privately held retail agency to retail agency transactions happen every year.
The Misperception About Agency Values and Private Equity Buyers
The Private Equity (PE) infusion into the IA system is a fairly recent phenomenon that has created a fundamental realignment of the IA business model. It has also created an unprecedented amount of myths and misperceptions about agency values and selling options.
Five Things to Consider When Selling Your Agency
The process of selling your agency can be a long and winding road. As an agency owner, your agency has become a major part of your identity and is synonymous with your name in your community (often times the agency is the owner’s name). You have spent countless hours and energy building your business, serving your clients and engaging with your company […]
The Gap Between High and Low Performing Independent Insurance Agencies is Wide and the Effects are Severe on Agency Valuations
Based on recent studies published on the health of the independent agency system, the gap between high and low-performing insurance agencies is significant. According to the 2022 Big I-Reagan Best Practices Study, the top quartile of Best Practices agencies grew by over 22% and the average best practices agencies grew well over 8%. As the […]
Traditional Independent Agencies are Losing the M&A Game
We are experiencing the greatest wealth transfer in the history of the independent agency (IA) system and traditional retail independent insurance agencies (privately held) are getting crushed in the merger and acquisition (M&A) game. According to Optis Partners, the IA system experienced a record 1,061 M&A transactions of independent agencies and brokers in 2021. There […]