Many Insurance Brokers that are considering the sale of their agency have a variety of factors to consider. One of them is that there is no such thing as staying the same.
You may think you can ride this storm out, not make any changes, not spend any money for growth, and just try not to shrink. But you can’t. Especially in the insurance distribution system, there are forces of change all around that can’t be ignored and ultimately, if you’re just trying to stay the course, you will be clinging onto an asset (your agency) that is losing value the longer you hang onto it. This is a topic that could take up several articles, but our business is truly changing in ways that the typical insurance agent has no control over, such as:
- Consumers viewing insurance as a commodity at a price and nothing more.
- Direct writers and lead aggregators growing exponentially on the Internet.
- Carriers reevaluating agency distribution strategy and marketing direct to consumer, in some cases as a “knee-jerk” reaction to Internet popularity.
- Banks, credit unions, franchises, regional and national brands taking considerable market share from smaller local agencies.
- Regulatory changes affecting fee and contingency bonus income.
- Rapid consolidation.
It’s not to say these industry forces can’t be addressed head-on with a proactive strategy for organic and acquired growth. But if you don’t have the ability, desire, or business strategy to diversify your income sources or acquire other agencies to keep growing, then there may be no better time than right now to consider selling.