top of page

Considering selling your insurance brokerage? Here are some pointers…

Brokers spend years building their businesses up to desirable levels. But, as with most things in life and due to various factors at play such as succession, retirement, emigration or desire for change - to name but a few - there comes a time to move on and sell your business. Making the decision to sell is more often than not where the simplicity lies. Extracting the monetary value out of the business is where it gets interesting.

On paper, exiting a brokerage and selling your business sounds relatively simple, but it tends to be more complicated than you might think. Over the years many sellers have ended up leaving substantial money ‘on the table’ when embarking on this process solo.  

Firstly, finding a buyer can be tricky. Where do you start? Approaching a competitor or an insurer could leave you in a compromised position in two ways:

  1. It has an immediate effect on existing market relationships. 

  2. It leaves little to no leverage in the negotiations.

In addition to navigating this conflict, many potential sellers are worried about the confidentiality of the transaction within the market and among their staff and clientele.  Secondly, how do you find the right buyer? In addition to ensuring that there is an element of trust amongst the parties, the seller needs to determine that both companies are compatible culturally to ensure smooth continuity for the staff and clientele. Thirdly, once a potential buyer is identified, ensuring the outcome is fair and unbiased for all parties is a priority – especially if this is the first and last time a transaction of this sort has been explored.  Additionally, once a decision is made on selling a business, timeframe and minimising disruption are key factors to consider as part of the sale process. Both factors play a massive role in ensuring momentum and ultimately sealing the deal. 

Premium Finance Partners (PFP) recently launched Continuity Solutions, an insurance-specific, sell-side advisory service that helps brokers with the process of exiting their businesses from start to finish. Here’s how it works: 1. Engagement Due diligence and valuation are carried out on the seller’s business and accompanying book to ensure the business is ready for sale and that the price expectations are aligned.  2. Proposal A sell-side proposal is provided to the broker, which includes proposed floor valuation, break fee, payment structure, potential buyer panel, timeline expectations, etc. 3. Investment prospectus An investment teaser is sent off to a selected investment network of brokers. Depending on the seller’s appetite, this ranges between 5 and 35 buy-side insurance brokers.  4. Due diligence Following receipt of buyer feedback and investment appetite, PFP:

  • prepares the buyer engagement agreement

  • sets up the seller’s data room

  • completes the full investor pack

  • commences an investor roadshow 

  • drives the due diligence process

5. Execution PFP obtains firm offers from potential buyers and presents them to the seller for consideration. Once presented, PFP runs a competitive bidding process and provides advisory assistance on the various offers. The advantages of using PFP’s Continuity Solutions offering include:

  • Price maximisation – Our competitive bidding process ensures that we maximise the price for sellers. 

  • Access to various leads and offers – Access to over 35 buyers who have been pre-approved and sit on PFP exclusive acquisition panel.  

  • Reduced administration – PFP will manage the entire process on the seller’s behalf to ensure minimal disruption to the existing operations of the business

  • Assistance with corporate finance aspects – Our expertise and experience in this space ensure all corporate finance matters are facilitated correctly. 

  • Independent advice and negotiation – We are independent of any parties and therefore not conflicted in any manner; this ensures the seller’s interests are exclusively prioritised. 

  • Insurance specific focus – We understand the insurance market and the specifics of a brokerage business

  • Efficient process – Our process ensures the sales process is finalised efficiently and according to the seller’s mandate.

If you are thinking of exiting your business and wondering whether this may be the right time to execute this decision, contact us on 011 568 2617 or Together we can make the process seamless and ensure you get the worth you deserve.



bottom of page