Independent Insurance Agency Sales Alert – December 2020

Welcome to STG’s final edition of 2020’s Insurance Agency Sales Alerts. As the year draws to a close, it’s clear that 2020 has been one of the most dynamic years the US has experienced. We are proud of the many STG buyers who added to our having a strong production year despite the continual stream of distractions. As we predicted, the insurance brokerage industry has prevailed, remaining an active and financially rewarding industry sector.


SHOP A: California. Independent agency, established 22 years ago, specializing in Property and Casualty, now available for sale. This agency may be relocated rapidly, currently based in an Executive Suite. Carriers include Safeco, Progressive, MetLife, Infinity, and more.
Reported Revenue: $150K / Asking Price: 2.3X of revenue / Tracking Code: DCATM

SHOP C: Arizona. Independent agency specializing in health coverage (Medicare, employee benefits, and Group Health), available for sale in scenic Arizona. Established more than 20 years ago, this agency’s carriers include United Healthcare, Aetna, Cigna, Humana, BC/BS, and more.
Reported Revenue: $250K / Asking Price: 2.5X of Revenue /  Tracking Code: DAZCC

SHOP N: California. Full-service independent agency, started from the ground up in 2009, now thriving in the California Valley. This broad-spectrum insurance agency has 1 full-time employee and 1 part-time employee. The agency holds direct appointments with Kemper, Travelers, Progressive, and many more.
Reported Revenue: $170K ($35K Fees) / Asking Price: 2.25X of Commission Revenue and 1X of Fee revenue / Tracking Code: DCAEG

As we compare our figures from 2019 to this year’s, we do see fewer M&A transactions due to the constraints of the pandemic. However, activity remains high, and the overall trajectory of extensive M&A activity is expected to remain strong. Desirable acquisition targets will continue to draw competitive bids; in fact, competitive activity will likely increase target valuations.

Beginning as early as 2021, the election outcome may result in tax changes for owners. At present, sellers are realizing positive value. Broker acquisitions will continue, driven by the investment community’s perpetual desire to locate high recurring revenue, low capital expenditure ventures.

Thus, STG expects agency ownership transitions to accelerate unabated. Because today’s insurance agencies are often owned by individuals who are entering retirement, they are open for domination by mid-career investors. The notable lack of succession planning displayed by current owners will benefit those who are prepared, experienced, and financially secure.

As we shift our focus to the coming year, STG clients continue to bid competitively on buying opportunities for several key reasons, including:

  • Gaining critical mass by capturing market share and expanding in scale
  • Expanding into new market regions
  • Backfilling organic growth gaps by accelerated growth
  • Streamlining operations and specialty resources

Springtree Group has a robust, in-house financing practice. If you require financing, we strongly urge you to contact us, so that we can integrate your M&A endeavors with supporting financing. Your costs will not increase, your workload will be mitigated, and your odds of success will be significantly higher. Protect your investment efforts from botched financing, which remains the leading cause of failed deals.

Your association with STG gives you access to our outstanding array of services and financial support. We are uniquely qualified to support your acquisition, perpetuation, and operational needs throughout North America. We are proud to support our customers in both North and South America, Africa, the Bahamas, and Europe. Please email to obtain further information on the agencies we have highlighted in today’s Sales Alert.