How to Prepare For Due Diligence When Selling Your Insurance Agency

When selling an insurance agency, every suitor will want to conduct due diligence. This post will discuss the items needed to determine a price for your agency and start to show it to potential suitors. Once a suitor shows true interest and wants to make an offer, we’ll need additional information. Below is what’s needed in order to determine your asking price and to start showing the agency to potential buyers.

  • Commission Statements for the past year. Commission/Fee Revenue for the past 3 years.
  • Profit and Loss for the past 3 years (if available). If no P&L is available, we can help you create one. We have templates available so we can list your expenses in an organized manner so you can sell your Insurance Agency.
  • Commission Revenue for your top 3 carriers in the past year.
  • New Business App Count for the past year.
  • List of Key Employees that will help the new owner continue conducting business.
  • Personal and Corporate tax returns for 3 years

With this information we can determine an asking price and begin to bring qualified buyers to your agency. Once an offer is received, most Owners or Companies will require additional documentation in order to complete the sale. Requests might include:

  • All active and inactive Personnel files
  • Balances of any remaining leases that the new owner will be inheriting (and copies of office leases)
  • Trust and Operating bank statements for 3 years
  • Loss Ratios for all major carriers for the past 3 years.

This information may seem overwhelming, however in order to complete a purchase some or all of this information will be requested. Depending on the type of sale, amount of sale and many other factors, this list can vary. Some buyers won’t request certain items while others will. Insurance agency acquisitions are like snowflakes; no two are alike.

Ganis Consulting can help you compile this information in order to prepare for Due Diligence. Having the ability to generate this information shows potential buyers that you’re an organized business they want to acquire. Let’s face it nobody wants to take over a business that’s unorganized and sloppy. One of our advisors will walk you through this entire process and get your agency prepared for sale.

Again, as the process progresses, our team will help you organize and compile the data necessary to complete the sale. We’re with you throughout the entire transaction to ensure a smooth and easy closing. Please call or email us if you’d like to speak with an advisor about buying or selling an insurance agency. We’ve assisted dozens of owners buy and sell insurance agencies and we can help you too.

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