are you readyAs we delve into our second post focused on succession planning, we look towards addressing when to start planning and where to go given the multiple tracks for exiting your independent insurance agency.

When to Start Planning

As with most big decisions, it is never too early to start planning. According to a recent Property 360 article, it’s best to start considering your exit plan in your 30s. However, most owners make the mistake of waiting too long, not starting the process until their late 50s or 60s.

The reason it’s suggested to start planning early is so you can avoid having too many individuals leave at one time. You want to ensure there is a steady flow of retirees, leaving time for new, young agents and other employees to be trained. Similarly, your plan needs to be continually updated as employees come and go, and as your agency’s market value changes.

Where to Go

As mentioned in our last post, there are multiple exit options for you and your agency. Each has its own benefits and drawbacks, and it’s important for you to explore which is best for you.

Transfer to Family Member

+ Keeps agency in the family                               – May continue to be financially tied to agency

+ Perpetuates mission and values                                     – Little to no cash gained

+/- Able to stay involved in agency operations              – Cannot guarantee advice will be heard/heeded


Sell to Family Member or Employee

+ Keep up agency culture                                                    – Cash gain may be low

+ In competent, experienced hands                                  – May continue to be financially involved

+ Some cash gain


Selling to Outside Party

+ Largest cash benefit                                                          – Loss of company culture

+/- Exit from involvement                                                   – May be damaging to employees


Retain Ownership and Move to Passive Role

+ Keep up agency culture                                                    – No cash gain

+/- Able to stay involved in decision making                   – Financial risk still attached

Take into account you and your agency’s specific needs and goals when making your decision. There are many options to face, but it is most important that you choose the option that is right for you.

SIS knows your agency’s unique needs, which is why we offer personalized service and customizable options with our Partner XE. Help us get to know your agency today – contact us today at [email protected].

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