Mergers & Acquisitions
The Average Age of an Insurance Agent in the United States is 59. You’ve worked long hours to build your business and to take care of your clients. Your business doesn’t have to retire just because you do! We want to buy it!
We offer a fair market value for your book of business, with several different payout options – whatever is best for YOU. We offer a lump-sum payout, or a payout over several years – or a combination of the two, depending on your preference. Our mergers and acquisitions buying process can be completed as quickly as needed or gradually over time – whatever is best for your situation and needs.
We know your business and are in business to serve your clients your way. Your book of business would have its own dedicated licensed insurance agent to service the needs of those clients.
Primary consideration factors for selling your book of business
Below are the initial items we are going to ask you for after you’ve executed a mutual NDA.
- Your initial asking price.
- Adjusted EBIDTA
- Total client base by product type and carrier.
- Total first year commissions by product type
- Enrollment quality such as rapid disenrollment, policy lapse rate, renewals, etc.
- Last 3 years of financial statements
- Current YTD financials
The next step of the sales process after the initial discovery is receiving a letter of intent which is typically for a set period such as 60-90 days. During this time, we will begin the due diligence process with you, to work through the final value of your agency and kick off deal underwriting.
Learn more by contacting the FSA Health Acquisitions Team today!
Additional insurance mergers and acquisitions considerations
Aside from the standard considerations, below are some additional areas that may be considered by us. It’s important to have everything organized so FSA Health can easily see the value of your book and how it will sustain the current customer base and continue to show profitability post acquisition.
- Total Policies Sold. Total insurance policies sold during AEP compared to OEP and rest of year (Medicare agencies only).
- Proprietary technology such as CRM, lead generation technology, or cybersecurity that has a material impact on retention, cost of acquisition, or protection of consumer data.
- How many full-time insurance agents on your team and the ratio between experienced and new agents as it relates to sales volume.
- Effectiveness of referral channels. Strong referral channels are a great indicator for a profitable agency if the referral sales volume has a significant impact on controlling acquisition costs.
- Proprietary lead generation such as integrated social media webinar funnels or SEO rankings.
- Unique sales incentives that are key to sales success and employee / sales team culture.
- Insurance lead costs and the average acquisition costs of a new customer for the various insurance plans you’re selling which have a big impact on agency cash flow.
- Loss Ratios
Minimum qualifications
If you’re considering putting your insurance agency for sale, we are looking for the following minimum EBIDTA amounts.
- $100-$250K
- $500K
- $1M
- Acceptable retention rate and loss ratios.
Entrusting Your Book of Business to FSA Health Insurance Agency
For over 40 years, Financial Services of America and FSA Health Insurance Agency continues to serve the state of Michigan and beyond with customized business solutions and unmatched customer support. We are an independent, family-owned local business with a qualified and experienced staff committed to providing the best options for you, your employees, and your clients.
Interested in learning more about the variety of available options as you look to sell your book of business? It’s time to relax and enjoy your life; contact our office today to review which exit strategy is best suited for you!