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 /  Insurance & HR / Services / Merge with CBIZ / Property & Casualty / FAQs
FAQs

Quickly find answers to your specific questions about a potential acquisition by CBIZ.

What types of insurance firms are you most interested in?

We are generally looking for (non-captive) independent retail or wholesale insurance agencies / brokerage firms with total annual net commission revenues greater than $2 million. These include retail personal and commercial lines focused agencies as well as wholesale brokers, including managing general agencies (MGA) and managing general underwriters (MGU).

What will you pay and what kind of deal structure will you use?

Agency owners will find that we understand where the market is likely to be for their agency and that if we are interested and deem their agency a “fit”, that we can be extremely competitive with other potential acquirers, including the large brokers and banks. We do not have just one method for structuring a purchase and can be very flexible to meet the needs of the seller. We usually build in a significant initial down payment (and guaranteed deal minimum) at the time of closing and then make annual adjustments and additional payouts depending upon the performance of the agency's revenue or profit as earned.

As agency owner, what happens to me?

Ideally, we would prefer that the agency's former owner(s) stay involved and work in the agency for as long as possible and for as long as they are willing. We will often pay a little more for the security of knowing that the former owners are willing to stick around and help us make sure the business stays on the books. In retirement situations, we would ask that the sellers agree to at least stay involved for some defined period of time.

If I stay on, at least for a while, how will I be compensated?

This depends upon your role and what you want to do. Once we mutually agree what you will be doing we can determine how to fairly compensate you. For example, if you continue to produce business we would anticipate that you would continue to earn commission like any other producer in the agency. If you will be managing, it would be reasonable for you to be salaried with a bonus structure, etc.

What changes will you make to the agency's staff?

We are very aware that the business is closely tied to personal relationships with you and your staff. We want to preserve those relationships and make certain that we can successfully maintain the business we just bought. We are not interested in cutting and gutting the expenses, including the staff. Provided we can make a reasonable profit, our goal is to retain all of the key people you have working in the operation today.

How long does the whole acquisition process take?

This depends greatly upon you. Only you can decide whether, when and how to sell your business. With that understood, we are prepared to move as quickly or as slowly as you would like. We have concluded some deals in as little as 45 days and others have taken years as we continue to meet and talk, off and on, get to know each other and work out what the right arrangements are to satisfy all parties, etc.

Why should we consider CBIZ as opposed to selling to another agency we know in town, a large broker, a bank or just implementing an internal perpetuation plan?

Only you can decide which option is right for you. Each of these types of acquirers has advantages and disadvantages that are very important for you to consider. We think that we are different because we plan to change as little as possible and operate the agency more closely with the way you have run it than what these other acquirers are likely to do based upon their history and structure. Selling to us presents far less risk than selling internally to the next generation in the agency because you'll generally get paid more quickly; you won’t have to worry about their failure to run the agency well and/or being unable to pay you completely. We feel that we understand better than most other acquirers that the clients of the agency are tied to the employees and that these relationships are vitally important. We don’t view relationships as an expense that can be trimmed; we view them as a major part of the asset we are buying.