Home › Tips for Conducting Successful Due Diligence

When it comes to buying an insurance agency, you should take time to understand the agency that you’re planning to purchase. Without a thorough due diligence process, you won’t be able to examine detailed information about your prospective agency’s operations and finances. If this process is entirely new territory for you, you’ll want to learn a few tips from the experts.  

Buying an Insurance Agency

Tips for Conducting Due Diligence the Right Way

Do Some Research

Have you found the insurance agency that seems to be a good strategic fit for you? Before you take the plunge, be sure to get as much information about it as possible by using all of your resources and networks. Aside from contacting field reps who are familiar with the agency and its owners, doing a deep dive on the internet is also a must.   

Contact the Owner Directly

After conducting your non-intrusive search, the next step is to contact the agency’s owner to ask about it. At this point, they’re going to weed out non-serious buyers and keep those who are genuinely interest intrigued. If the conversation with the owner leads you to believe the agency is a good fit, you’ll want to enter into a due diligence process.  

Sign a Confidentiality Agreement

For the most part, the Confidentiality or Non-disclosure agreement protects the seller as they give you access to sensitive and confidential information about the agency. It ensures that the information shared will remain between the seller and the prospective buyer.   

Use a Due Diligence Checklist

At this stage, you’ll gain access to the insurance agency’s financials, tax returns, intellectual property, contracts and agreements, production trend data, and outstanding legal matters. You’ll also get to check agency management system reports, real estate information, and information on employees. Using a checklist can help you track your progress through the entire due diligence process. 

Buying an Insurance Agency

Considering Buying an Insurance Agency?

At Energia Consulting Partners LLC, we’re here to contact agency owners on your behalf and assist you with every step of the buying process.