This will be the final installment of STG Insurance Agent Alerts for 2021. This year, our buyers have added to a strong production year for the industry despite a number of challenges. The insurance brokerage industry has proven to be resilient and dynamic – specifically in the past two years. In 2021:
- Agency profitability reached all-time highs.
- Agency growth remained stable with pre-pandemic results.
- The percentages of agencies purchasing other agencies remained on par with prior annual cycles.
The ongoing demand for independent agency acquisitions is driven by the institutional investment community’s desire to invest in high recurring revenue, low capital expenditure businesses. In our view, agency ownership transitions will continue to accelerate.
As we shift focus forward to 2022, the overall landscape of extensive broker M&A activity is expected to continue in a similar fashion, as buyers continue to compete for desirable acquisition targets. This competitive tension is likely to continually push target valuations up.
Our buyers typically have one or more of the following critical motivations:
- Gaining critical mass, capture market share, and build scale
- Entering new market areas
- Accelerating growth, backfilling organic growth gaps
- Providing for better utilization of operating efficiencies and specialty resources
The listings below are a SMALL SAMPLE of the current open inventory of independent insurance agencies that we have information about. For a complete list of agencies for sale, please reach out to us at firstname.lastname@example.org.
SHOP C: Oregon This independent Group and Individual Health Insurance Agency that has been writing Health Insurance since 2001 is now available for purchase. The agency writes business with Providence, BCBS, Kaiser, Pacific Source, and more! The agency started 20 years ago and desires to sell off their Group and Individual Health business only. The health side of the agency has one full-time, licensed employee and the seller requires that she continue working with the new owner.
Reported Revenue: $340K / Asking Price: 2.4X / Tracking Code: DORLM
SHOP G: Michigan. A 20-year-old independent health insurance agency located in Michigan is now for sale. The agency sells Group & Individual Health, Medicare Supplement / Advantage, and ancillary products. The primary carriers include BC/BS, Meridian Care, Priority Health, Delta Dental, United Health, and more. The agency has one employee who would like to continue with the new owner.
Reported Revenue: $189K / Asking Price: 2.4X of Revenue / Tracking Code: SMIJS
SHOP H: Missouri. An independent P&C agency with a heavy focus on Commercial Trucking Insurance is now for sale. This agency is located south of St. Louis and holds appointments with Travelers, Progressive, Sagamore, Northland, and others. The agency has one long-standing employee who is interested in staying on with the new owner and one of the owners is willing to stay on to assist with the transition.
Reported Revenue: $220K / Asking Price: 2.75X / Tracking Code: DMOIV
Please note that Springtree Group also has a large financing practice. We can integrate your M&A project together with a financing package. Remember: botched financing is the number one reason deals fail, and this is one of the motivations for providing our buyers with financing as needed.
When you work with STG to purchase an independent insurance agency, you’ll have access to our M&A tools and services. Your acquisition and transition events will be supported by our experienced teams from start to finish.
Proudly serving customers in North America, South America, Europe, Africa, and the Bahamas. Please email Service@SpringtreeGroup.com for more information on the agencies listed in today’s Alert.