Your Agency May Be Just What Some Bank Is Looking For
When the fit is right, selling your agency to a bank can be the perfect option for the agent who wants access to capital and new customers to expand the business dramatically. It also makes sense for the agent whos looking toward retirement.
There generally are two types of agents who decide to sell their firm to banks:
One type wants to retire immediately or almost immediately and get the best sale price and highest financial security for their retirement.
The other type is the exact opposite. Rather than retiring, they want to take their careers to the next level and make more money. Selling to a bank gives them access to the banks vast customer list and significant cross-selling opportunities.
What Bankers Look For
Its a myth that bankers are looking to acquire big agencies. What theyre looking for are high-quality operations and skilled management, regardless of size.
Bank acquisitions fall in two categories. If the bank hasnt been in insurance before, it must acquire a platform agency. This is the most crucial acquisition, because it will be the foundation or infrastructure on which the banks insurance business is built. Once the bank has a platform agency, it looks for agencies in the second category: additional books of business that it can simply buy and bolt on to its platform agency.
If your agency is a potential platform agency, keep in mind that the bank will want to use it as a framework for additional acquisitions. Management will want you to be able to show your ability to help integrate and manage more acquisitions. Smart bank executives are looking for an agency management willing to continue on for an extended period to manage what they expect to be a key profit center for the bank.