Buyer Type Options

What: Large national firms likely built over time through a series of acquisitions of local and regional independent insurance agencies. May be public or private.

Pros:

• Usually have the funds to pay a competitive price
• Have experience in closing the transaction
• Often have robust infrastructure, capabilities and resources to offer 

Cons:

• May have a distinct corporate model, rigid culture and way of doing business
• You lose your small, friendly and entrepreneurial culture, perhaps dramatically changing the way you do business
• You have no autonomy or control, perhaps losing staff

Considerations: How is this structure likely to be received by employees, clients and yourself?

What: Banks that have acquired independent insurance agencies

Pros:

• Opportunity to deepen relationships with existing bank customers by offering them insurance products in addition to traditional bank services
• Have experience in closing the transaction
• Ability to offer clients bank services 

Cons:

• Very different cultures and work environment
• Ideal client criteria is not aligned
• Disparate compensation between bank and agency employees can potentially cause dissatisfaction
• Banks may face increased regulatory risk by providing insurance services​ and may seek to leave the insurance business

Consideration: Whether you, your employees and clients want to be controlled by an entity that doesn’t really understand your business yet wants something from purchasing you that you might not want to or be able to deliver.

What: Agencies that sell to or merge with other agencies in their community.

Pros:

• You may be familiar with the quality, calibe and culture of the agency
• There may be local synergies resulting from combining businesses
• Merging may remove a local competitor for both agencies

Cons:

• If local marketplace and competitors know that you are considering selling, it might result in some of your competitors trading on the rumor by attempting to “take” your business rather than purchase it
• Local agency acquirer is not suitable to you
• May not have the capital to fully complete the transaction as promised 
• Insurance carriers may cancel contracts

Considerations: How is this structure likely to be received by employees, clients and yourself?

What: Agency owners who sold their interests another agent within their own agency. 

Pros:

• Usually creates the least amount of disruption and change for the agency's staff and clients
• May be the preferred way for the agency owner to monetize their investment in the agency, especially if they are being bought out by their own family members or long time trusted associates  

Cons:

• In most cases, this option pays the owner / seller the least attractive price
• Their next generation may not be able to fulfill their purchase obligations

Considerations: If you aren’t fully paid, what business is likely to be left to take back, even if you could come back after years of inactivity? How confident and trusting are you in those to whom you would be selling your interests?

What: Medium sized, private national broker with entrepreneurial culture focused on building long-term successful partnerships

Pros:

• Offers a competitive purchase price for your agency and has the capital to complete the transaction 
• No competitive history with your agency
• Maintains your confidentiality, viability and credibility in the marketplace
• Values your agency’s culture and relationships
• Will invest in the business over time and takes a long-term view
• Offers growth opportunities from referrals and cross-sales with other CBIZ financial units

Cons:

• Would likely require key principals and employees to enter into employment contracts and stay with CBIZ (at least during the earn-out) after the sale (but hopefully, longer)
• Requires that your agency’s culture be compatible with CBIZ culture and that it can be effectively “merged” with ours and perpetuated
• Expects that agency leadership be capable of functioning autonomously/independently without much day-to-day direction from us
• Assumes that agency leadership and staff are capable of delivering financial targets using their own and (new) CBIZ resources
• Uses a team selling and service model that may not work well for “lone wolf” producers