What It's Worth: Valuing Insurance Agencies

September 2021 PDF

BVR (editor)

Business Valuation Resources, LLC

What It's Worth: Valuing Insurance Agencies takes a deep dive into the unique considerations for insurance agency and brokerage valuation. The report draws upon the best data and industry sources available, including DealStats, Vertical IQ, and Business Reference Guide. It also summarizes Lucas Parris' (Mercer Capital) webinar with BVR in which he shared his expertise and insight – as well as the long-term outlook for consumer preferences and financial performance. The report draws upon the best data and industry sources available, summarizes key insights and appraisal factors, and will help guide your professional judgment in determining a conclusion of value that is as reliable as ever.
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Table Of Contents


Section I: Industry Overview

1. Insurance Industry Structure and How Firms Operate
2. Macro Drivers of Value and Profit in Insurance Firms
3. Assessing the Risks Inherent in the Insurance Industry
4. Questions to Ask Management: Operations and Risks

Section II: Current Trends and Forecast

5. Overall Trends Impacting the Insurance Industry
6. Update on COVID-19-Related Issues Impacting Insurance Firms
7. Cash-Flow Considerations Specific to the Insurance Industry
8. Forecast for the U.S. Insurance Industry
9. Questions to Ask Management: Recent Trends and Cash Flow

Section III: Valuation Practitioner Perspective

10. The Primary Value Proposition: How Insurance Agencies Make Money
11. Key Valuation Drivers: External, Internal, and Qualitative Factors
12. Best Methods for Valuing an Insurance Agency
13. Practical Tips: Three Case Study Scenarios
14. Impact of the Affordable Care Act (ACA) and Final Considerations

Section IV: Analyses of Key Court Cases

15. Analyses of Key Court Cases in Insurance Agency Valuation

King v. King
(2021, Florida; marital dissolution, agency valuation, goodwill)

Stowe v. Stowe
(2020, North Carolina; marital dissolution, agency valuation, rules of thumb, goodwill)

R. Kashmiry & Assocs. v. Ellis
(2018, Ohio; shareholder dispute, buyout, buy-sell agreement)

Redmond v. NCMIC Fin. Corp. (In re Brooke Corp.)
(2017, Federal Bankruptcy; insurance franchises, constructive fraud)

Russell v. Allianze Life Ins. Co. of N.A.
(2015, Federal [Mississippi]; lost profits, Daubert challenge)

Gallagher & Co. v. Babcock
(2012, Federal [5th Cir.]; lost profits, breach of employment agreements

In the Matter of Zulkofske
(2012, New York; dissenting shareholder, statutory fair value)

In re Texans CUSO Insurance Group
(2010, Federal Bankruptcy; lost future profits)

Herbrand v. Herbrand
(2008, Wisconsin; marital dissolution, expert’s independence and objectivity)

Evenson v. Evenson
(2007, North Dakota; marital dissolution, choice of multiplier)

In the matter of Overbey
(2008, Washington; marital dissolution, buy-sell agreement, market approach)

Held v. Held
(2005, Florida; marital dissolution, goodwill)

Section V: Selling and Succession Planning

16. M&A Landscape for the Insurance Industry
17. Insurance Industry Provides a Timely Opportunity for
       Exit Planning Services

Section VI: Benchmarking Data and Research

18. Summary Valuation Data and Multiples From DealStats
19. Ratios and Financial Benchmarks
20. Rules of Thumb From the Business Reference Guide
21. Insurance Industry Research and Resources

Look Inside the Report