Has Your Agency Value Peaked?
Is this a question you have found yourself asking? If so, we will explore what to do next. First, let’s start with the evaluation process of determining whether your agency value has peaked. For me, this question arose when I was meeting with an agency owner that was sharing that they had made the decision […]
5 Reasons to Use IA Valuations for an Insurance Agency Valuation
Getting a valuation of your insurance agency is an important decision and a tool to understanding the fair market value of what is likely your greatest financial asset. You can get a valuation from many sources. Each of those sources has a motive, experience, and credentials for providing the service. In this article, we will […]
The Power of Using an Agency Valuation as a Business Planning Tool
To know where you are going, you must first know where you are currently. The biggest step in business planning each year is having a clear metric for the agency’s success. We believe the most effective metric and report is to get an independent fair market valuation of your agency. The valuation report will give […]
Factors that Affect Agency Value – Growth
There are over 25 factors that we review when placing a fair market value on an independent insurance agency, and annual revenue growth rate is one of the most important factors that affects an agency’s value. If you are reading this, it is quite likely that you are contemplating how to grow your agency in […]
The 6 Steps to Sell Your Insurance Agency
So, you’ve made the decision to sell your insurance agency. While reaching that decision is incredibly difficult, the next stages in the process do not get easier. Therefore, we are laying out the six steps that you should go through to plan, prepare, negotiate, and execute the transaction. 1. Independent Fair Market Valuation First, get […]
Perpetuation Planning – The Sooner The Better
When perpetuating an agency, it is important to remember that the earlier you start your planning, the more options you will have, and having more options increases your value. Agencies that wait too long or don’t plan effectively will have fewer viable options and may not realize the full potential value of their agency. Time […]
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% […]
Planting the Seeds for Your Agency’s Future to Bloom
Many agency owners are unsure of their exit plan, and many fail to take the time to consider their options as they are busy running their day-to-day agency operations. But, a time will come when they must decide whether they will sell externally to a third-party buyer or sell internally to family or key stakeholders. […]
The Outsized Impact of Contingent Income
In our last article, we noted the impact of contingent income on agency profitability. We found that 34.3% of the agencies in our database rely on contingent income to be profitable, and that too many agencies are running their businesses as though contingent commissions are guaranteed each year. To further emphasize the importance income to […]
Reliance on Contingent Commissions for Profitability
Contingent commissions first appeared in the 1960’s. As insurance companies cut the commissions paid on premiums, they offered an offset as a way for agents to make up for the lost commissions – with strings attached. Agents who met certain goals tied to premium volumes, and the profitability of the book of business, could earn […]