Increasing your Agency’s Value

[AgencyEquity]

Agencies that sell for a high premium do so because of the quality of the book. What does a quality book mean? Here are some characterics of a quality book:

1. Well rounded accounts with a minimum average of 2 policies per account
2. Policies with high liability limits and even more so, accounts with umbrella policies
3. For personal lines, accounts rounded with at least a homeowners policy, if not an umbrella
4. For commercial lines, professional offices risks are at the most stable side, contractors are the least stable
5. Personal Lines accounts with premiums of 2.5k and up
6. Commercial Lines accounts with premiums of 5k and up
7. Agencies that have a scheduled client contact program
8. Agencies that have a up to date management system that can pull a number of different reports about the book of business
9. Quality carrier appointments, either on your own or through a cluster sub-appointment

They key is management, agency principals tend to get wrap up in sales and often do not put in place an infrastructure of to help accomplish the goal of a well managed agency. Doing this takes investing, which means paying an experienced office manager, getting the right management system, having the right contact programs in place and setting agency standards of what accounts you are to target. Those who have a plan to round out existing accounts are two steps ahead of the game, but even better yet how many peole go out and sell the entire account from the first meeting? I would rather sell one account of three policies than have 3 difficult clients who think it’s okay to have 3 different agents. Sometimes, turning away bad business to focus on getting good business makes a good management sense. The agencies that are well managed and have quality accounts will have a lot more quality potential buyers to choose from when it is time to sell their Agency. On AgencyEquity.com, the best agencies get well over 40 inquiries, while a non-standard auto agency will be lucky to get 5 inquiries. Which agency do you want to be when it’s time to sell your agency?