Avoiding Disappointment After an Insurance Agency Transition Event

Buyer’s remorse is something we all want to avoid. When you’re investing hundreds of thousands or millions into a high-level opportunity like an independent insurance agency, the stakes are even higher. Today we’re sharing tried-and-true tips on how to avoid disappointment after an insurance agency transition event, along with the main reason deals can leave you feeling pangs of regret.

What Causes Disappointing Deals?

When investors snag an agency off the market, sight unseen, the rates of buyer’s remorse are high: Harvard Business Review reported 70% of buyers and sellers alike later felt these familiar pangs. When either party neglects to do proper research and do their due diligence, expect disappointment to follow.

How to Avoid Disappointment

Have the Facts About an Agency’s Financials

There’s no substitute for a look at the books. A robust agency will have seen growth for the last 3 – 5 years. Make sure your offer lines up with the financial reality reflected on paper, no matter what the owner claims about the state of the business.

Understand the Agency’s Daily Operations

The general overview you’ll gain from casual research won’t be enough when it comes to analyzing operations. Rather than being surprised by the functioning of an agency, take the time to do some digging.

We recommend visiting the agency multiple times. Look for:

  • Good customer service
  • Consistent use of dependable accounting software
  • Positive interactions with carriers

Listen to the Community

Review a list of existing customers. Look at the products they buy, the revenue generated, and how long they’ve been with the agency.

Look online for feedback, too; ratings sites and social media are good for seeing the best and the worst feedback side by side.

Once You’ve Purchased an Agency

Keep Building Connections with Existing Customers

The key to long-term success is actively building relationships with customers you’ve already brought through the doors. This holds doubly true when you first acquire an existing insurance agency; the clients need to feel confident that you will continue to provide excellent service at competitive rates.

You acquired this agency to keep customers happy and bring new clients in; because you’ll have done your homework, this step will be easier. Communicating the value of your agency, your strong drive to please your client base, and your long-term goals to usher the agency to continued success will go a long way toward making both existing and new clients feel secure.

Avoid Snap Judgments About the Staff

Despite how an employee may seem on paper—or after brief interactions—you may be surprised by how they manage their day-to-day responsibilities. Take the time to have conversations with each employee and watch them do their jobs.

Look back into their work histories and ask directly whether they have skills that the agency is underutilizing. By making it clear that you want each employee to have a fair chance to demonstrate their potential and come together under your leadership, you will increase morale and increase their drive to do well, even during the transition.

Springtree Group builds long-term relationships with our investors; your long-term satisfaction is our priority. We represent the opportunity to invest in independent insurance agencies with confidence.

When you choose Springtree Group, you’ll have total support: from the available agency research process to securing financing and making your offer, Springtree is positioned to help your investments succeed.