What agency buyers ask first
- Book of business by carrier, line and renewal month
- Retention rate and how many policies moved to other carriers
- Carrier contracts and whether they assign to a buyer
- Who owns the client relationships, you or your producers
- Commission income, contingent income and what is at risk
The Book Is the Product
An agency's value sits in its renewing policies. Buyers ask for a book by carrier, by line of insurance and by renewal month, along with the commission each policy produces.
Recurring income earns a higher multiple than most other service companies, because it repeats without new sales.
Retention Tells the Truth
A buyer will ask how many customers left each year and why. Florida owners have seen carriers leave the market and policies move. Show where you kept clients and where you could not.
Carrier Contracts
An agency depends on the carriers that will write its business. Buyers check which contracts allow assignment, whether any carrier has restricted new business and how much of the book is concentrated in one company.
If a carrier has pulled back, say so and show what replaced it.
Producers and Relationships
If a producer holds the client relationships, a buyer wants a non solicitation agreement and a plan to keep that person. If you hold them, expect a transition period where you introduce the new owner.
How the Price Is Paid
Buyers often pay part at closing and part over time, tied to retention in the first year or two. That protects them against a book that leaves. Ask for a clear definition of what counts as retained.
Seller notes carry their own Florida tax. See Florida documentary stamp tax on a seller financed note.
Regulation and Licensing
Agents and agencies hold state licenses, and the new owner needs the right ones in place. A broker and attorney can sort out who must be licensed before closing and what can wait.
What Raises the Price
High retention, many carriers, producers who stay and a book spread across several lines all raise the multiple. A book that sits mostly with one carrier, or with one retiring producer, lowers it.
Read how Florida buyers price a business for the general math.
Client Communication
Clients should hear about the change from you first, in a planned letter or call. Buyers will want a say in the message, since a rushed one can lose policies.
Next Steps
Other recurring income companies are covered in selling a vacation rental management company. To see a private range for your agency, send the form or call (305) 555-0147.