Should I Sell / Merge?

[insurance1822]

In my efforts to expand into the commercial world, I'm starting to realize I simply can't compete w/ the local big dog IA's. They have like 100 carriers & a market for every risk out there, along w/ account managers & an infrastructure that I can't compete with.

I'm starting to think it would make sense to approach them & ask about a merger. I have a very profitable personal lines book that's about 3MM right now. Any idea how this would even work? What would be in it for them per say?

 

[FL P&C Broker]

I think brown and brown has a setup like that. You sell the book to them. You keep some equity, run your office independently but get access to their infrastructure.

 

[Derrick]

Have you taken the time to look at MGAs or wholesalers for commercial? We don't do a ton of business but we have 2-3 commercial agencies that each have access to 20 commercial insurers or so. Some overlap but we make it work.

 

[Early]

Just guessing, but you are an IA with about 1,500 policies and $3M premium. Your probably grossing about $450K plus bonuses. Why not just keep that book and find a cluster/facilitator? Being very profitable you bring a lot to the table so they'll welcome you with open arms. In picking the cluster, make sure you get direct appointments, you own the book, you get 100% of the commissions and only give them a cut of the profit bonus plus a monthly fee. I did and it worked out great. Then pick the commercial niches you enjoy working with. Picking the right cluster group and the right niches will give you success without sacrificing the hard earned PL book you spent years building.

 

[agentinsouth]

In my efforts to expand into the commercial world, I'm starting to realize I simply can't compete w/ the local big dog IA's. They have like 100 carriers & a market for every risk out there, along w/ account managers & an infrastructure that I can't compete with. I'm starting to think it would make sense to approach them & ask about a merger. I have a very profitable personal lines book that's about 3MM right now. Any idea how this would even work? What would be in it for them per say?

I am sure you already thought of this, but just incase.... Until your book grows, why not stick to industries and areas that have to be surplus? That way it is an even playing field. Also, what state do you write in? I have some I refer commercial to, but am looking for someone new.

 

[GXR2]

If you do, freedom will be your sacrifice. You won't be able to turn back. Think long and hard before you sell out.

 

[agentinsouth]

I think brown and brown has a setup like that. You sell the book to them. You keep some equity, run your office independently but get access to their infrastructure.

Also, B&B only allows AM best A rated personal lines carriers... No Demotech rated carriers... That would be an issue in my area. Especially w/ your size personal lines book.

 

[indienoise]

Specialize.ESPECIALLY in the commercial world. Why give up all the hard work and long hours you spent building your agency? You, of all people on this forum, seem like you ought to be scrappy enough to put up a fight. Build. Add carriers. Grow. Hire producers. Put yourself in a position to be on level ground with larger agencies. Sure it will be a long process. You won't be able to win all the business right now. But you could down the road, and still be truly independent. You're in SIAA, can't they at least help you along the way? You've already given up some independence for that. Don't be an *** and give it ALL away. Don't think short term, unless you're just a loser who can't play the long game.

 

[BigSteve]

Use the SIAA QuickStart 102 and 103 training.

 

[GXR2]

Just guessing, but you are an IA with about 1,500 policies and $3M premium. Your probably grossing about $450K plus bonuses. Why not just keep that book and find a cluster/facilitator? Being very profitable you bring a lot to the table so they'll welcome you with open arms. In picking the cluster, make sure you get direct appointments, you own the book, you get 100% of the commissions and only give them a cut of the profit bonus plus a monthly fee. I did and it worked out great. Then pick the commercial niches you enjoy working with. Picking the right cluster group and the right niches will give you success without sacrificing the hard earned PL book you spent years building.

^^ What he said

Join/add a commercial aggregator and specialize.

Specialize.ESPECIALLY in the commercial world. Why give up all the hard work and long hours you spent building your agency? You, of all people on this forum, seem like you ought to be scrappy enough to put up a fight. Build. Add carriers. Grow. Hire producers. Put yourself in a position to be on level ground with larger agencies. Sure it will be a long process. You won't be able to win all the business right now. But you could down the road, and still be truly independent. You're in SIAA, can't they at least help you along the way? You've already given up some independence for that. Don't be an *** and give it ALL away. Don't think short term, unless you're just a loser who can't play the long game.

^^
Agree. Give up ownership and you're DONE.