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Looking to Sell Your Book of Business and Exit the Industry?

The interest in buying small to medium-sized benefits agencies is greater than ever before, making this a great time to exit the industry. However, gearing up before selling is key if you want to maximize the value you’ll get from the transaction. Selling your agency or book of business takes time. When you make the decision, you won’t immediately find a buyer. You will deal with buyers that most likely have done more than one acquisition and, on the contrary, this will be the first and only time you are selling. In this week’s post, we share the key strategies to implement when getting ready to sell your book of business.

Why Is It Important to Get Ready to Sell Your Book of Business?

During the first six months of 2019, mergers and acquisitions in the insurance industry hit the highest numbers since 2017. With 328 deals, the number of small insurance brokerages is decreasing while larger firms consolidate. At some point in time, most brokers realize that they must sell their book of business. The reasons can vary from age or health to the need for capital.

If you are thinking about exiting the industry, there might not be a better time. Still, when you decide to sell your book of business, you need to prepare. There are external factors that escape your control such as the economic environment, but there are others that you need to work for, such as historical performance, projected future earnings, net worth, risk factors, or the status of your book of business. If you’ve done a good job over the years to build a strong base for your insurance agency, you can start implementing the strategies shared below to market your book of business and attract potential buyers.

Show growth of mergers and acquisitions to signal good year to sell your book of business
Mergers and acquisitions growth from 2010 to 2018

Implement a Technology Solution to Sell Your Book of Business

Nowadays, one of the goals of technology is to make our lives easier by allowing us to store everything online. Ask yourself, how quickly could another broker pick your book of business up and begin working with it? For example, if a buyer acquires your book of business tomorrow and they get a call from a client the next day, could they answer the questions and help that specific account? Below we share two reasons why it?s important to implement a technology solution before selling your book of business.

importance of tech when you sell your book of business

Filing Cabinets Are Outdated

It can be really difficult to sell your book of business when all the information is in paper files, spreadsheets, and filing cabinets. You might have a process in place, but whoever buys your agency won’t know it and won’t want to spend time learning it. Therefore, implementing a technology solution that is organized, searchable, and accessible anywhere is key to attracting potential buyers. By compiling all your information in one system, you’ll be preventing huge headaches to your buyer since everything will be hosted and secure online.

Clean Contact Records

Technology won’t only help you compile all your information in one place, but it will also help you clean your data and make your contact records appealing. If you implement a technology solution and the team entering the data sticks to the same method, you’ll have the best book of business possible. For example, decide between “United HealthCare” and “UHC”, don’t use them interchangeably. In addition, a contact record is always evolving and you have to be able to show your buyers that you are keeping everything up-to-date. Implementing a technology solution will make updating the records much easier and less time-consuming.

It can be daunting to implement a new technology system, but it’s worth it. Overall, showing a potential buyer how easy is to look into your book of business and work with it is a great selling point. The more complete picture you paint about your contacts, the better it will be for someone else to understand and continue a meaningful relationship, and that is very difficult to do when you have to shuffle through papers and filing cabinets.

Prove Your Retention Rate

The insurance industry has one of the highest customer acquisition costs. Therefore, when you decide to sell your book of business, it’s key to prove you have a high retention rate to demonstrate the true value of your book. The buyer doesn’t want to work to keep the current clients but to win new ones. Here are two retention marketing strategies you can start implementing to prove your high retention rate:

Communicate with Your Clients

A good communication strategy to clients is key to increase retention rate. Do you have a marketing plan in place? Do you have touchpoints identified in your customer journey to tailor your messages? Do you have emails automated to go out to clients for important events like policy renewals or birthdays? Talking to your clients only during open enrollment is not an effective strategy. When a buyer is looking into your book of business, they will consider how easy is to pick up your communications plan and offer the same level of service to your clients. Buyers will look for a smooth transition and a plan already implemented to maintain that high retention rate.

Create Powerful Customer Testimonials and Drive Referrals

When clients are happy with the service you provide and they are ready to stick with you for a long time, they are willing to tell the world about it. Ask your clients for testimonials and proof of their commitment to your agency. This will show your buyer your book of business is filled with high-value customers. In addition, show the number of referrals these committed customers have driven to your business. Both testimonials and referrals are proof of how valuable your book of business is.

Final Thoughts About How to Sell Your Book of Business

The mergers and acquisitions don’t seem to be slowing down, making 2019 a great year to start the process of selling your book of business. However, the competition is high and your book of business needs to be attractive enough to get the attention of a buyer. Getting ready to sell your book is key to obtain the maximum value in the transaction and walk off with a profit. If you are thinking about exiting the industry, now is the time to implement a technology solution and prove the high retention rate in your book of business.

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