Finding the national limit for agency acquisition

When considering the sale of an insurance business, choosing the right buyer is critical not only to a quick transaction but to the long-term success of the business.

According to Vaughn Stoll (pictured), senior vice president and director of acquisitions at Brown & Brown, the ideal buyer should offer more than just capital – they should offer strategic benefits that improve business performance and market conditions.

“The right buyer will not only make your business the number one player – it will give you an unfair advantage in the field,” he said.

Stoll said one of the most important qualities to look for in a potential buyer is their ability to hire and train sales and support teams effectively. The ideal candidate should have established programs focused on upskilling the existing team, whether through advanced training in customer engagement or filling required management roles.

“Your people matter,” Stoll said, “and the best bet for your business will be the infrastructure and programs in place to elevate and grow your team.”

Another important factor is the balance of accounting and management support provided by the acquiring company. Stoll advised against a one-size-fits-all approach, where the buyer fully centralizes these functions or leaves them entirely to a local team.

Instead, he suggested looking at a buyer that offers a hybrid model, allowing the acquired business to maintain its strengths while getting support where it's needed most.

“For example, if you have a strict controller, your business will not benefit from switching to fully centralized accounting,” he said. “In this case, your finder can manage your cyber security while allowing your team to manage local tasks and roles. If you lack accounting and management talent, your buyer should provide regional resources to support these activities.”

Expertise in a variety of insurance products, as well as niche areas, is another attribute that Stoll highlights as important to a potential buyer. Joining a larger organization should enable the business to better serve existing customers and expand into new markets.

Stoll warned against consumers who claim to cover a wide range of products without specific information.

“Look for specific expertise in areas such as assurance, cyber, critical risk, aviation, trade credit, transportation and stop loss,” he said. “This can present a great opportunity for you to serve your customers locally with the strong support of a national force that helps improve customer outcomes.”

Stoll also highlighted the importance of consumer relationships within target markets. Because insurance carriers often operate geographically, the depth of consumer connections in certain regions is important.

Meaningful collaboration within the consumer organization is another factor to consider, according to Stoll. A potential buyer may have a large network of locations, but if there is no real collaboration across offices, the acquisition may not add significant value.

Stoll advises joining an organization that prioritizes building relationships among its leaders and fosters a culture of ownership.

“For example, Brown & Brown is 22% partner-owned, and more than 65% of the group's partners worldwide have some form of ownership in the firm,” he said. “Think about what a 'culture of ownership' means to you and your business and how you can achieve that when you're evaluating a potential buyer.”

Ultimately, Stoll suggested that the right acquisition partner should maximize the existing team's strengths while addressing any weaknesses. He encourages business owners to carefully screen potential customers to ensure their skills align with business priorities and long-term goals.

“The right acquisition partner will maximize your team's strengths and minimize its weaknesses. “Take the time to evaluate the skills you may be able to buy and make sure they align with your team's priorities and goals,” Stoll said.

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