Valuation and Perpetuation Services for Insurance Brokerages
Whether you’re trying determine the correct value of your business or set it up for long-term success, we have the tools, expertise, and talent you need.
Our Unique Approach to Valuation
We combine technical valuation expertise with the industry’s best benchmarking data on agents and brokers, giving you more than just a number.
We use the Best Practices Study and the Reagan Value Index (RVI), a proprietary index comprised of firms that we value on an annual basis, to provide key valuation benchmarks and insights.
Our valuation reports deliver a comprehensive assessment of your agency, providing you with an objective analysis of the firm’s financial, production, and operating performance.
Fair Market Valuation
Few things require more precision, insight, and experience than determining the correct value of your business and navigating the range of options for optimizing it. Fair Market Valuations are complex products with specific rules and legal precedents attached. They’re also essential for a wide variety of agency functions and transactions:
Brokers need to carefully contemplate the purpose of a Fair Market Valuation, as the purpose has implications on the valuation’s methodologies and assumptions used in the analysis. Too often, independent agencies seek to assess their value using potentially dated standards, such as the old industry norm of 1.5 times annual revenue. These standards never tell the whole story and may be dangerously inaccurate.
If you need a Fair Market Valuation, you need an experienced, technically astute valuation firm that is familiar with the unique characteristics of the insurance agency business and its changing environment. We’ve valued hundreds of agencies, providing each with a complete, accurate picture of their business and the factors that drive value.
Internal Stock Transfers
Buy-Sell Agreements, Shareholders Agreements, Operating Agreements
Equity-related Compensation Plans
Employee Stock Ownership Plans (ESOPs)
Tax Purposes
Corporate Performance Evaluation
Mergers and Acquisitions
Perpetuation Planning
Valuation Estimates & Analysis
Agents and Brokers often need a perspective on valuation without needing a full Fair Market Valuation report. We perform dozens of calculations of value and other valuation estimates each year, leveraging our extensive Fair Market Valuation data and our proprietary database of M&A transactions.
If you are looking for an indication of how your business might be valued—either internally or in a third-party transaction—we have the experience, transaction data, and technical expertise to get you the answers you need.
Ownership Perpetuation Planning
As insurance brokerage valuations have increased over the past few decades, several industry leaders have caught lightning in a bottle by offering equity ownership to attract and retain top industry talent. Brokerages that were owned by one or two founders a generation ago are today owned by ever-expanding groups of active and highly engaged employees.
This very positive trend brings with it some challenges and potential pitfalls, particularly for firms that intend to remain privately-held beyond the current generation. With each new level of success achieved, the number of issues expands. For example:
Will there be enough capital to fund the repurchase of retiring owners’ equity when it’s needed Will there be enough next-generation shareholders to drive sufficient growth to perpetuate How does the firm continue to make ownership affordable for the next generation, even as agency values continue to rise? How must organizational governance evolve as the number of shareholders expands?
Reagan is the industry leader in helping top firms plan for successful perpetuation. We start by listening carefully—working diligently to discern exactly what our clients wish to accomplish—and then customizing solutions that help them get there.
Equity Incentive Plan Development
People are an insurance brokerage’s most valuable asset. Attracting, motivating, and retaining outstanding employees is critical to success. As the industry’s battle for talent has intensified in recent years, firms have searched for ways to creatively differentiate themselves. An increasingly common approach is offering impact players a wealth creation opportunity that goes beyond the traditional paycheck: the equity incentive plan.
Equity incentive plans have become popular as a method of “sharing the wealth” created by the explosive growth in agency values our industry has enjoyed over the past few decades.
If structured and communicated effectively, an equity incentive plan is an investment that can pay for itself, since it ties rewards to exceptional individual and organizational performance. However, a poorly designed incentive plan can backfire, leaving key employees disillusioned.
Reagan is the industry leader in helping design and implement these plans on a customized basis to ensure they achieve the intended results.
Our success in custom building these plans comes from our unique combination of a) industry experience and knowledge, b) our proprietary access to a wide range of real-time industry benchmarking data, and c) our history of developing and helping implement equity incentive plans for the industry’s most visible, top performing firms.
Leadership Team Construction and Succession Planning
As the trusted advisor to the industry’s highest-performing brokers, Reagan regularly serves a key advisory role in helping clients plan for a successful future. A critical part of this is identifying the leadership capabilities needed for the next stage of organizational growth—which may include new executive roles and a successful leadership transition between generations.
Reagan’s industry experience and deep research into the industry’s top C-suite leaders provide unique tools and insights, enabling us to assist clients in assembling and transitioning high-performance leadership teams.
Areas of assistance include:
Defining the executive functions needed
Identifying and assessing candidates
Assisting in the development of identified candidates by providing content and peer networking assistance
Helping map leadership transition plans
Executive compensation design based on industry peer benchmarks