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Insurance and financial services

Independent insurance agencies

Wild Rose Advisors advises the owners of independent insurance agencies, whose value lies in a book of renewals and its composition.

What a buyer pays for

In this trade, value is driven by the share of the work that recurs without being sold again, more than by revenue.

  1. 01

    Renewal Commissions

    A buyer prices the recent commission history against the likelihood that it renews. Retention, carrier concentration and line mix constitute the valuation, and two agencies with the same revenue can be valued very differently.

  2. 02

    Premium Cycle

    Personal auto books follow the premium cycle. When rates have risen, trailing commissions are at their strongest, and an owner considering a sale may weigh the timing accordingly.

  3. 03

    Transferable Appointments

    The book moves only if the carriers move with it. Whether the agency's appointments assign on a change of control is a diligence question best answered before a buyer asks.

The buyers

Agency aggregators and insurance distributors backed by private equity continue to acquire books, and minority investors may offer an owner a way to take value out while keeping the agency. Which carriers an agency writes for shapes which of those buyers will pay most.

An owner who has received an approach may bring the offer to Wild Rose Advisors before signing anything. A letter of intent usually carries an exclusivity clause, and once it is signed the seller's leverage is largely gone.

All Sectors

The Practice Serves

  • Independent agency owners who own the renewal book
  • Personal lines books, where the timing of a sale matters most
  • Commercial lines agencies with multi-year retention to present to a buyer

Wild Rose Advisors welcomes conversations with the owners of founder-owned companies.

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