Professional & B2B Services · Buyer guide
Buying an Insurance Agency business
Published · Reviewed by The Diligence Standard Team · Updated
an Insurance Agency can look attractive on a summary P&L while the operating details underneath it change the cash flow, transferability and capital a buyer will actually own. Diligence should connect the reported earnings to the business-specific drivers that create them.
How the business works
Renewal commissions, retention, carrier relationships, producer ownership and concentration determine value.
Risks to test
- Producer/client relationships
- Carrier appointment transfer
- Book attrition
- Owner production
- Commission reconciliation
- E&O exposure
Evidence to request and reconcile
- Policy/client book
- Commission statements
- Retention cohorts
- Producer agreements
- Carrier appointments
- E&O claims
Decision questions
- What book follows each producer?
- Will carrier appointments transfer?
- What is true retention?
- How concentrated is revenue?
- What owner production must be replaced?