Over the past few years, there has been a surge in insurance agency management transitions. Mergers and acquisitions specifically are on the rise, with an estimated 550 deals, up 12% from the previous year, in the first quarter of 2021. While these transitions can be profitable for owners, they can come with significant trepidation and worry from employees and customers.

As an owner, you need to start thinking ahead about how to prepare your agency for its eventual ownership transition. Whether you plan to perpetuate internally or externally, it’s essential that you prepare. That preparation includes setting your agency up for its highest valuation, prepping your team, and investing in tools and processes to bring your agency into the future.

Financial Prep

One of your top goals should be to set your agency up to gain its highest valuation. Whether you’re selling internally or externally, it’s beneficial to add the most value possible to your business. Spend time defining the methods you’ll use to determine your worth and focus on how to boost them. One of the best ways to increase your value is to focus on a niche market. Carve out a few areas that you specialize in, and capitalize on that exclusivity.

Tech Prep

Part of increasing your value is equipping your agency with the tech it needs to stay competitive in the market. Invest in critical insurtech like a cloud-based management system and integrated accounting. Successful agencies have turned their focus to customer tech tools like a client portal and branded agency app. You’ll also need marketing automation and a customer relationship management tool to stay on top of valuable data to inform your marketing and service plans.

Beyond the technology itself, you also need to train all of your team on each new tool. Even if you don’t anticipate a particular team member or group will frequently use a new piece of tech, they still need to know what it is, how it works, and why it’s valuable. Keeping your team educated is part of setting your agency up for a successful future.

Staff Prep

As you create a perpetuation plan, keep your staff involved in the process. You need to be aware of how each department and team member is performing as part of your valuation process. The more open and connected you are with your team, the better they’ll perform since they’ll be more invested in future success.

Open communication also helps ease any anxiety around change. Change is uncomfortable in any context, but especially when it comes to one’s job. Continual training on new technology and a slow introduction of process updates can help normalize change in your office.

Partner Right to Prepare for the Future

Who you partner with has a significant effect on your agency’s future. We at Partner Platform know how important it is for our agencies to be well-equipped with the best technology and training to stay competitive in the market.

That’s why we invest in tech and training for all our Partner Platform agencies. And our technology partners help us stay ahead of the curve for the best insurtech to serve both our agencies and their customers.

Hear from our agencies about their experiences here. Or, get in touch today at [email protected] or 800.747.7005, Option 6, to find out more.

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