Many insurance agency buyers aren’t interested in purchasing an agency with an office, employees, equipment and other liabilities. They prefer to purchase a book of business, move it to their current location and forward the phones to their existing office. This is extremely common and happens on a daily basis.
Many Personal, Commercial and Health Insurance Agencies function without ever meeting their clients. They issue quotes by phone, obtain signatures by fax or email and handle all service over the internet, phone, fax and email.
The proper terminology for an insurance operation that can be moved into your office is commonly known as a “fold in”. Of the 8 transactions we performed this year 4 of them were agencies that didn’t require a retail or other office location. The buyer picked up file cabinets, forwarded phone lines and started servicing the book from their office.
Unfortunately not all insurance agencies can be a fold in. In many of the non-standard insurance agencies, the client is dependent on the location. They use the office to make payments, process endorsements and purchase their policies. Many of these agencies depend on clients walking in to purchase new business as well. By moving an insurance agency such as this, you’d lose a large percentage of the clients if the office is no longer there.
This is a key question every insurance agency buyer should ask to make sure they don’t lose the clients they purchase. Insurance Agency sellers will know whether or not the business can function without the office and are usually the best indicator as to whether or not you should attempt it.
As always, please feel free to contact us if you need any assistance with buying or selling an Insurance Agency or Brokerage.