BY AMY EVANS
In October 2021, my employee benefits agency was acquired by Shorepoint Insurance Services, an Acrisure agency partner, and I joined Shorepoint as an Associate VP of Employee Benefits. California Broker Magazine editors asked me to write about my experience in a four-part series. In this first installment, I’ll share my reasons for wanting to sell my agency, and the challenges I encountered while building my exit strategy. In future installments, I’ll share the steps I took to position my book of business for sale, how I found the right buyer, and my experience during the selling process.
I’ve been in the insurance industry for almost 20 years, and I started my own agency, Colibri Insurance Services, in 2015. I’ve always been open about the fact that I don’t plan to be in the insurance business for the rest of my working life. From the start, I wanted to have a well thought out exit strategy that would honor the value I was building in my book of business (both the revenue and client relationships), expand on the level of service that my clients and their employees have come to expect from me, and allow me to make a graceful exit from my business when I was ready.
The two “traditional” exit strategies in our industry — die at your desk or retire on the golf course — never appealed to me. So, I set out to find an alternative that would work for me. I had conversations with recruiters and mergers and acquisitions (M&A) specialists to understand my options, and their message was consistent — my book of business would have to be generating more than $500,000 in annual revenue to be of interest to a buyer. I never planned to grow my business to that size, particularly because I didn’t want to hire the staff to support it. What were the options for someone who built a solid book of business that was generating less than $500,000 in annual revenue?
I also didn’t want to wait to sell until circumstances — foreseen or unforeseen — forced me to. Compression in our industry — larger agencies buying up smaller agencies — has made it harder to compete in the small group employer market in Southern California. Competition from payroll companies, Professional Employer Organizations (PEOs) and tech companies is shifting the perception of value from service (which I can control) to price (which I can’t control).
I definitely had some big-picture concerns. What if my book of business started losing value rather than gaining value? What if I lost my largest client? What if new legislation made my job even more complex? What if insurance carriers reduced small group commissions AGAIN, leaving me to do the same amount of work for less revenue? What if I had a life event or a health event that kept me from running my agency? All of these scenarios were real possibilities and I didn’t want to have a knee-jerk, “I want out” reaction that would result in less value for my book of business and more disruption for my clients.
So, I kept talking to recruiters, M&A specialists and people who sold their agencies. I asked a lot of questions and took notes. I learned the lingo, got familiar with the questions that prospective buyers asked, and got a feel for the market. I was open about what I wanted and clear about what I didn’t, especially when recruiters kept suggesting buyers who were clearly the wrong fit. I entertained possibilities but often felt unseen, unheard, under-valued and disappointed.
(Note to the M&A guys – don’t send a slick-talking Property & Casualty guy who doesn’t understand employee benefits to pitch a woman who has an emotional connection to her business and every single one of her clients.)
I also watched the market shift. More investment money flooded into our industry to fund acquisitions that went further and further down market, and the long-term value of group insurance contracts was validated by the non-insurance companies like Zenefits and ADP TotalSource that started openly competing for our business.
While all of this was happening, I focused on growing my book of business and taking what I learned to make solid investments in technology and client services, with the confidence that the right opportunity would eventually present itself, even if my annual revenue never hit that $500,000 mark. Eventually, with conscious effort the right opportunity did evolve. There are many steps I am glad I took that helped me to position my book of business for sale. I’ll share those in the next installment.
The two “traditional” exit strategies in our industry — die at your desk or retire on the golf course — never appealed to me. So, I set out to find an alternative that would work for me.
AMY EVANS is now associate VP at Shorepoint Insurance Services. She has more than 20 years of experience in the insurance industry simplifying employee benefits for employers and their employees. In October 2021, her insurance agency was acquired by Shorepoint Insurance Services, an Acrisure Agency partner, and is now operating under the Shorepoint name. As an associate VP with Shorepoint, Amy works with employers to help them navigate the complex world of employee benefits, business insurance and risk management.
Amy is passionate about empowering professional women to network more effectively. In 2019, she founded AlignWomen, a leadership and networking organization for professional women. She is also the host of The AlignWomen Podcast, which features female entrepreneurs, leaders and other professionals who have demonstrated agency and innovation in their personal and professional lives.
Amy is a frequent speaker, writer, podcast guest and social media participant and you can find her engaging regularly on a variety of topics including health insurance issues, entrepreneurship, social media strategies, women’s empowerment and networking with intention. Direct: 323-633-2263 | amy@shorepointinsurance.com