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Insurance Agency
A thirty-five-year-old Dallas-Fort Worth insurance agency with a $6M premium book written through a major national carrier, sold with its own 2,400 square foot office building.
Business Highlights
- A $6M premium book built over more than thirty-five years with a single major national carrier
- A recent agency acquisition expanded premiums by roughly 20%
- Turnkey 2,400 square foot commercial office building included, on a main street location
- Staff tenure runs from seven to twenty-eight years
- The carrier pays triple new business commissions to new agents in their early years
- Ownership transfer requires the buyer to become a licensed agent with the carrier
Considerations / Questions to Ask
- Ownership transfer requires the buyer to become a licensed agent with the carrier. What does that process involve, and how long does it take?
- Commission runs at roughly 10 to 11% of premiums. How much of the total is bonus income that varies year to year?
- What is the retention rate on the book, and how much of it sits with the longest-tenured staff rather than with the agency?
- Is the office building included in the asking price or priced separately?
- What are the carrier's requirements and restrictions on an agency sale, including any right of approval over the buyer?
Opportunities
- The carrier's triple new business commission for new agents materially changes the economics of writing new policies in the early years
- The recent acquisition shows the book can be grown by buying, not only by writing
- Long-tenured staff means a buyer inherits capacity rather than having to hire before growing
- Owning the building removes rent from the cost base and gives a buyer options a leasing competitor does not have