Managing an insurance agency comes with many challenges. One of the largest of these is revenue growth. To get a true “head start,” you might consider purchasing an existing book of business or acquire another agency.
Over the last year, CoVerica’s Agency Alliance Team has facilitated five agency acquisitions on behalf of Independent Strategic Members; a group of independent insurance agencies in the DFW metroplex that are part of the National SIAA network run by CoVerica. These acquisitions have made it easier for some of our long term and new members to quickly generate income, as purchased books of business usually come with immediate renewal commissions.
Purchasing a book is challenging and requires planning, LOTS of patience, and reasonable capital.
Before looking for a book of business to purchase, we suggest starting with the following:
- Interview another agency owner who has purchased one or more books of business.
- Click here for advice from three different agents.
- Define your short and long-term business goals.
- Research banks and/or lenders that specialize in insurance book purchases.
- Get pre-approved for a loan.
- Line out your acquisition plans, including desirable book size.
- Be familiar with your target market territories and where the clients in the book reside (having more than one target geography is essential to any agency’s success).
Once a prospective agency is identified:
- Evaluate the book mix and customer demographics to identify retention and new business opportunities and challenges.
- Identify system integration requirements and/or the broader agency technology road-map.
- Prepare your employees for the customer transfer process.
If you’re an entrepreneur that is planning on purchasing an insurance agency and/or book without prior insurance experience, it’s best to make sure you’re aligned with a business partner or mentor that is a seasoned insurance professional. Doing this will help you avoid mishaps and ensure you get a better return on your investment.
Most agency owners start their agency with some level of insurance experience, and for these individuals, it’s wise to leverage the relationships you already have in the industry when formulating your acquisition plan. This, in combination with the considerations highlighted above, will make the experience much less stressful – for you, your employees, and the customers and carriers hanging in the balance!
If partnering with a network that can provide assistance with this process is valuable to you, please contact our team at email@example.com. We’d be happy to answer any questions you have about our program and partnership, including details about all mentorship opportunities you’d benefit from. Assistance in agency acquisition is just one of the many benefits our team can help you with!