Is it time to sell your insurance agency?

As a consultant to the insurance industry, I work in many facets of the industry.  One my favorites is in the mergers and acquisitions field.  Over the past several years I’ve worked closely with many agency owners that were considering a sale.  I’ve found that lots of owners have thought about selling.  However, the ones that move from thinking to acting have one thing in common – they know why they want to sell.  Below are some of the top reasons people decide to sell their organization

Have you been thinking about selling your agency?

You are tired of the “burden of ownership”

This one is by far the most common.  What is the “burden of ownership?”  It’s writing checks.  It’s waking up at 2:00 in the morning in a cold sweat.  It’s making the hard decisions where it feels like nobody wins.  For many people, the burden starts to weigh on you getting heavier and heavier each year.  If this is happening to you – you may want to look at selling.

You don’t have a perpetuation plan

This is the second most common one I see out there.  Here’s the deal – hiring young talent is difficult.  Training young talent – especially producers – is even more difficult.  Retaining them is even worse.  Because of this I see a lot of companies where the owner is ready to retire and there is no one to hand the agency to.  If you don’t have a perpetuation plan and you are planning on retiring in the next five years you should start making one right now.   If you are planning on retiring sooner and don’t have one you may have to look at other options. 

Your agency needs cash

This is one of the more delicate situations we encounter.  It’s embarrassing to many people but it’s important to know that good and valuable businesses sometimes run into problems.  Losing one big account can change the whole picture.  Sometimes you just need an exit strategy that pays the piper.

You need more resources to grow

This last one is one that I wish more people considered.  When I talk to agency owners there are two common barriers to growth.  The first is resources.  Resources make you more competitive and make you money.  However, resources cost money and don’t always yield a strong return in the beginning.  The second barrier is overhead.  Wal-Mart doesn’t have lower prices because they have lower profits – they have lower prices because they have the power of volume.  Sometimes merging with the right organization can solve these problems.

So that’s the first step – you need to know why you might sell.  This is so important because now you have the ability to listen to suitors and see if they can offer a solution to your problems.  This is also important because it allows you to explore alternatives to selling as well.  If you have a perpetuation problem, maybe you just need a good recruiter to help you with a couple of key hires…  I know a good one that specializes in the industry if you need a referral.  The next step is to identify potential suitors – I’ll cover that in another blog. 

So there you go!  What do you think – you can leave comments below or as always you can email me directly at sthompson@insurance-csg.com  

5 Most Important things Insurance Account Managers Need to Know When Interviewing

Hi blogosphere!  I hope you are all doing well!  Spring has sprung here in Iowa and we are finally getting some wonderful weather.  The best part of this for me is that my kids are constantly wanting to be outside.  Last night we had  our first family bike ride of the year and my boy Kai loved it!!!!

He's got it made!!!!

A good portion of my day is focused on interviewing  and helping account managers get jobs.  Often times it is really frustrating as I will ask specific questions and get general answers.  Many times it goes like this:

Me:  What industry segments do you work with?

AM:  I’m a generalist – I do everything.

This isn't helpful.  Not at all.  Most companies are looking for specific experience and because of this it is important that you are prepared to give specific examples.   A good practice when interviewing is to prepare by coming up with specific examples and specific information that you are ready share beforehand.  You can do this by practicing telling the story or just by writing it down on a piece of paper.  Doing this will help you seamlessly share the information when asked about it.  If you are an account manager and preparing for an interview I suggest you be ready to cover the following things:

1.  Industry Segments Covered

I hinted at this part earlier in the blog.  Often times I ask about this and people say a little bit of everything.  I get it, you have a broad book that isn’t bound by a common denominator.  However, I’m sure that you work with several clients in the same industry.  Instead of making someone pull teeth to get the information.  You can say things like – it’s a generalist book but our top four industries are construction, c-stores, monster truck dealers, and donut factories. 

2.  Specific Information about the book

This one is key!  You must be able to describe the book of business you work on.  Typically you should be able to answer the following:

·         Revenue size of book

·         Average size of account

·         Largest account size

·         Typical account size

·         Number of accounts

Sometimes you don’t have all of this information.  This is OK.  You still need to be prepared to give an educated guess.  People aren't asking because they want to steal a book.  They want to get a sense of your workflow and what you can handle.  Not knowing this makes you look like a button pusher that doesn't really manage the book.

3.  Markets

This one is pretty simple.  You need to be prepared to list out at least your top three markets from a carrier standpoint.  A common mistake here is overkill – don’t offer up more than your top 5-6.

4.  Coverage

This is another place where people bomb.  What coverage do you specialize in? A lot of times I hear property and casualty.  This doesn’t work.  People are looking for you to share your strengths.  You might write everything but I’m sure you’re better at something.  You need to be able to say 

something like:

I write a ton of property with an emphasis on wind or I write a ton of professional lines and do a ton of E&O.

You can make yourself look well rounded by adding to it but you need to be able to point out what you are good at.

5.  Your Actual Duties

Account Managers do different things in every agency in the world.  You need to talk about your specific responsibilities.  Make sure to point out the duties that most companies are looking for.  Make sure that you can account for all of your client facing activities and your marketing skills.  Most importantly, don’t assume that your interviewer knows your job – be prepared to tell them exactly what you do. 

So there you go!  What do you think?  Feel free to comment below or as always email me at sthompson@csgrecruiting.com.