When Should You Let Your Agency Be Acquired?
In an earlier blog post, we raised the question, “Is bigger better?” in regards to insurance agency acquisitions. Insurance companies big and small have been benefiting from the consolidation of the industry, showing that these acquisitions may in fact be a positive move for most who work in the insurance industry. If you are thinking of allowing your agency to be acquired, but are unsure of if now is the right time or if you should do it at all, it’s important to do your research and take advice from a trusted Insurance Agent Resource.
There are a variety of reasons why an insurance professional would let their agency be acquired. A few of the reasons, according to small business resource The Lane Report, include market pressures, the state of the economy, increasing costs related to running a business, and of course the increasing amount of regulations that small agencies must navigate.
Family situations are another big reason that agencies merge or allow acquisition; perhaps an agency owner is ready to retire, but has nobody interested in insurance that would be willing to take over the business. Therefore, an acquisition may be their best bet, to keep their family business active.
Of course, no matter the reason you may be considering a merger or acquisition, you have your employees to think about. Many owners do have a hard time selling, due to the loyalty they have to their staff; selling or merging often does result in layoffs, which is a difficult hurdle for employers to overcome.
Often, however, according the The Lane Report, new companies have a place for most or all employees of the agency they’ve purchased. In fact, many times companies will acquire a smaller agency for their employees’ expertise. However, no matter what you feel for your employees, the fact is that sometimes an acquisition or merger is necessary for your bottom line, to increase your market share and give you access to new markets.
In addition to bringing you the latest news from the insurance industry, PLRisk Advisors provides Resources for Agents and Brokers nationwide. We’ve recently implemented Hiscox Now, which allows agents their own access to Hiscox and instant quoting. PLRisk Advisors is a leading wholesale insurance brokerage covering the professional liability market. For more information about our products and services, please contact us today at (855) 403-5982.