This report was originally published in November 2018.
Whether you’re planning to compete for the next 20 years or transition your agency in the next few years, perpetuation planning is key to setting up your agency for success in the future.
Our Agent for the Future™ survey revealed that IAs are increasingly hiring millennials, focusing on growth and investing in digital innovations. These strategies contribute to perpetuation planning by adding to the valuation of the agency.
View the infographic below with key stats you need to know about agency perpetuation, read insights about how to increase your agency’s value, and read the full report on our findings about leading your agency into the future.
What’s your exit strategy? There are two main methods of agency perpetuation:
External: Selling to an outside buyer
- Growing the agency
- Looking for potential buyers
- Bargaining terms of sale
- Finalizing sale, earn-out starts
Internal: Handing off or gradually selling to a family member or internal successor
- New principal takes the lead
- Growing the agency, hiring staff
- Mentoring future leaders
- Transferring ownership over time
- Principal steps down (and the cycle begins again)
Most agencies want to perpetuate internally...
Source: Future One 2018 Agency Universe Study
In 2017, there were 604 announced insurance mergers and acquisitions deals.
That’s 31% more than 2016.
Source: OPTIS Partners
A growing agency is more attractive to buyers or successors
Here’s how IAs plan to grow:
- 78% increasing cross-sells
- 50% new lead sources
- 50% adding new producers
- 48% new digital capabilities (mobile, chat)
- 38% increase marketing investment
- 31% new market segments
IAs must hire and train future leaders for their agency to continue successfully
Most new positions are filled by millennials:
Producers
- 25% hired 1
- 20% hired 2
- 6% hired 3
- 7% hired 4 or more
Services & Support Staff
- 27% hired 1
- 15% hired 2
- 7% hired 3
- 7% hired 4 or more
58% of all hires are millennials.