Description
SOLD! ‘Q1 2020
High Net Portable Construction-Heavy Commercial Agency!
(Los Angeles County) – (Relocatable)
Seller Financing Available!
Zip Code: 90602
- Asking Price: $1,695,000
- Cash Flow: $400,000
- Gross Revenue: $700,000
- EBITDA:
- FF&E:
- Inventory: N/A
- Established: 2012
- Employees: 2
Business Description:
Large, portable, construction-heavy book of commercial business is the result of six strategic acquisitions over eight years now offered as a collective opportunity for an established agency to cross-sell its way to long term profitability or fast-track a new agency’s launch.
Since 2012, the company has specialized in construction-trade coverage and successfully grown into a robust and certifiable big book of business. Clients come from a broad geographical area and an immense range of trades seeking Worker’s Comp, general business liability and basic E&O coverage.
The complexities of commercial mean that strong relationships are needed for retention and to ward off internet shoppers. All files are loaded into AMS 360 for an easy post-closing transition. A purchase will also include six active domains, some of which are generating inbound leads daily, plus all toll-free phone numbers that ring with new and recurring business.
NDA is required for release of 25 pages comprehensive Confidential Information Memorandum crafted by ProNova Partners.
Detailed Information
- Facilities: Relocation encouraged. Space is currently integrated with Seller’s other business.
- Competition: A competitive space but relationships keep retention high. Organic growth is expensive; acquisitions have been the fast track to sustainable progress.
- Growth & Expansion: A tactical Buyer will capitalize on cross-selling opportunities then foray into growing emerging EPLI and protection against cyber-crimes and IT failures.
- Financing: Seller will carry long-term for highly-qualified Buyers with a substantial down payment.
- Support & Training: 4 weeks @ 20 hours per.
- Reason for Selling: Taking over another family business.
Industry Trend:
Small and Midsized Businesses Slow to Purchase Cyber Coverage – While the US cyber insurance industry grew significantly in 2017, small and medium-sized businesses are still hesitating to purchase policies. Direct premiums written increased 32% to $1.8 billion in 2017, with the number of policies in force rising 24% to 2.6 million, according to a recent report cited in Insurance Journal.
Growth is occurring primarily in national accounts and Fortune 500 companies with high-risk profiles. Companies are often buying packaged policies, as insurers bundle more cyber coverage into commercial property/casualty policies, as opposed to stand-alone cyber coverage.
The cyber coverage adoption rate for small and midsized businesses is in the low teens, providing an opportunity for insurers and brokers to expand sales into broader customer segments. Smaller companies tend to underestimate the potential for business interruption and are complacent about exposure to cyber events such as system failures and data breaches. The number of cyber claims increased to 9,017 in 2017, compared to 5,955 in 2016.
Industry Impact –
Opportunities to expand sales of cyber insurance are great due to low penetration in small to midsized business markets. However, a lack of historically tested cyber exposure models can make it difficult to underwrite and price cyber insurance.
Revenue (in current dollars) for US insurance agencies, brokerages, and related activities is forecast to grow at an annual compounded rate of 6% between 2019 and 2023. Data Published: January 2019
Industry Indicators:
US corporate profits, an indicator of corporate demand for insurance, rose 7.4% in the fourth quarter of 2018 compared to the same period in 2017. US personal income, which drives consumer ability to pay for insurance, rose 4.2% in February 2019 compared to the same month in 2018. Total US revenue for insurance agencies, brokerages, and other insurance-related activities rose 3.6% in the fourth quarter of 2018 compared to the previous year.
Consumers increasingly use carriers’ websites to get information about insurance and to find quotes, and in some cases bypass agents altogether, buying directly. The majority of life insurers offer software tools to model various insurance policies to customers. Many customers still prefer to buy insurance from an agent, however. Commercial customers especially prefer brokers to help them identify the best coverage for their needs.
Pricing is determined by the insurance carrier according to their models. Actuarial data for life insurance, crash data for auto insurance, and credit scoring for homeowner’s insurance are just some of the methods for determining rates and premiums. Agents receive commissions based on the amount of the premium and the type of policy. They often receive 50% or more of first-year premiums and 3% to 5% of renewal premiums thereafter. As a result, some agents may encourage customers to change carriers. Brokers may receive additional fees or compensation from customers and insurers for services provided in conjunction with policies.
ProNova Partners Buyer Profile & NDA
***RED STARS ARE REQUIRED FIELDS*** This information is required and must be filled in completely before the Seller will release any vital information, including business address, financial due diligence package on file, and other sensitive confidential information. It will also be used by ProNova Partners to match your buyer profile with future similar engagements our firm has for sale. * Required