What COVID-19 Means for the Insurance Industry

Dear Friends and Clients of Springtree Group,

We recognize the strain and disruption many of you are facing due to COVID-19 and the stock market conditions that have resulted from the virus, and we know you hope along with us that this health situation is resolved soon. Those who work in the insurance industry will recognize that we experience relatively little negative impact from even larger negative market forces such as these. Today, we’ll discuss what makes insurance a uniquely safe venture even in uncertain times.

  1. Insurance Is Still a Must-Have Item

As an item that we all must have, despite market conditions, insurance policies represent financial stability and complete protection. Thus, our sector will hold strong—likely even flourish—even as other market sectors falter and fail.

What may be true is that businesses and individuals may struggle to make their policy payments in full, despite having perfect payment histories. It will be essential for agencies to be creative and adaptable when strategizing payment plans that will support the clients and the overall business structure in a fully mutualistic fashion.

  1. Insurance Agency Valuations Hold Essentially Steady

Even during the ugliest market conditions of 2008, insurance agencies have held their valuations, experiencing drops of merely a few percentage points while surrounding markets plunged by as much as 70 percent. Our industry will remain a solid place to make an investment.

  1. The Fed Interest Rate Is Nearly Zero

Our industry’s dependability should be inducement enough to invest. However, the current fed rate hovering near zero creates undeniably economically favorable conditions, even for the most cautious among us.

  1. Market Forces Still Encourage Private Agency Owners to Sell

In past communications, we’ve discussed the forces encouraging owners to sell their private insurance agencies. The COVID-19 pandemic has intensified these pressures rather than alleviating them, meaning investors may find owners even more receptive to a solid offer. This is not a time when owners are eager to throw their efforts into continuing to grow their business; by shopping strategically in partnership with Springtree Group, you will be able to locate and negotiate skillfully for an agency that will grant you many years of financial stability and a prime opportunity to increase your wealth.

As always in times of struggle and hardship, we encourage you to reflect on the security and bounty that we do have, and then look outward to see who around you in your communities you could benefit.

Many hourly employees of community-owned businesses are facing great hardship as their incomes are reduced or taken away entirely. Many communities are organizing and refining efforts to bring food and shelter to those who need it most; consider this resource if you are looking for more ways to help.

Best wishes for you all in the coming weeks,

Sam Patterson, CEO