Top-Reasons Why Insurance Agency Owners Sell

older businessman in suit overlooking out building window at skylineRetirement

Retirement is the most common reason why profitable, successful independent insurance agency owners sell their business. Many use their proceeds to fund a large portion of their retirement income. For most, the decision of when to sell and retire is one of the most difficult they will make as a business owner. Being prepared, having a well designed exit strategy will help ensure that you maximize the value of your insurance agency, achieve your goals and objectives and reduce your tax liabilities.

Strategic Partnership

Selling to and partnering with a Private Equity (PE)- backed or Publicly traded national insurance
firm. These firms pay top-market value to attract, acquire and partner with various types of carefully selected, well run independent insurance agencies that, in general, are doing over $1M in annual
commissions/ revenues to accelerate growth and value. “Partner agencies” continue operate autonomously, maintaining their current operational team, leadership and associates, while gaining access to expanded resources, support and proprietary tools to better serve clients, fuel rapid growth and create value. Strategically, all PE -partner agencies are aligned through meaningful equity ownership and all Publicly traded partner agencies receive stock ownership. Each partner agency then has the ability to participate and significantly capitalize from the growth and success of the entire company. Typically, ownership will be required to stay for a 3yr.-5yr. transition period after selling.

Declining Health

Declining health can often force an independent agency owner into unexpectedly selling their business before they are ready. Unfortunately, when the health issue is chronic and time sensitive in nature, many owners do not have an exit plan in place to immediately start the sales process. If you are experiencing a health related issue or need to get started quickly, please do not hesitate to contact us. All communications will remain confidential.

Distressed man with forehead in one hand and glasses in otherBurnout

Is more often a common reason older independent agency owners give for selling their business. However, burnout is not dependent on age or necessarily length of agency ownership time. For a large majority of owners, establishing and growing their agency into a successful business took many years, perhaps decades. Their drive, determination and overall hard work is often deservedly credited as the largest determining factor of the success of the independent agency. Burnout is a reaction to prolonged or persistent job stress. This occurs, when that same passion and determination that fueled the success of the agency turns to feelings of physical and mental exhaustion, lack of purpose and unhappiness. Burnout seems to occur more often with the continual decline or stagnation in agency revenues.

New Business Opportunity

Finding a new business opportunity is another common reason why independent agency owners sell. Most agency owners are entrepreneurs at heart. Perhaps a new, exciting, more profitable business venture came along that the owner would like to pursue. However, often masked, there are other underlying reasons, declining revenues, boredom or burnout.

Contact Us

DCG Services National serves all types of independent Insurance agencies throughout the United States. If you are considering or planning to sell your agency or simply have a question or two, please do not hesitate to contact us. All communication will remain confidential.