SOLD-Bay Area Benefits Insurance Agency – (70% Small Group 30% Individual L&H)

SOLD ‘Q2 2019!

Bay Area Benefits Insurance Agency – (70% Small Group 30% Individual L&H)
Berkeley, CA – (Alameda County)
Zip Code: 94701

• Asking Price: $1,850,000
• Gross Income: $631,085
• Cash Flow: $371,433
• EBITDA: N/A
• FF&E: N/A
• Inventory: N/A
• Established: 1990
• Employees: 4 FT

Business Description

Perfect expansion opportunity for a health-light or health-heavy existing agency; or buy a job for an independent-minded licensed health agent! With this acquisition, the Buyer secures an existing operation that has a seasoned service team that all the clients love! Family style, collegial operation where service is a primary focus and contains a steady recurring revenue client base that just renews renews renews. 70% of the gross revenue is (small) group, 17% is individual products, and 13% is Medicare.

On the group side, 12 accounts are 21 lives & up, the balance (81 accounts) is under 20 lives. $159k in 2017 just from Blue Shield, other top revenue streams include Kaiser, Anthem, Aetna, Cal Choice, Healthnet, UHC, about 30 carriers total across all lines and coverages.

NDA is required to secure comprehensive Confidential Information Memorandum crafted by ProNova Partners.

Detailed Information

• Furniture, Fixtures, & Equipment (FF&E): Included in asking price Competition: Insurance is plenty competitive but this agency has a high retention rate and continues to profit year after year after year.
• Growth & Expansion: Upside exists for those that want to cross-sell the book of business for personal lines or commercial coverages.
• Financing: SBA Financing should be available to Buyers that qualify.
• Support & Training: As needed.
• Reason for Selling: Retirement.
• Facilities: Located in an exceptional location. Staff is willing to commute within reasonable distances {communte times} within the East Bay. The artwork is not included in the sale.

Industry Insights:

Companies in this industry act as agents to sell insurance policies and annuities underwritten by insurance carriers. Major companies include Arthur J Gallagher, Brown & Brown, and Marsh & McLennan (all based in the US), as well as Aon, Lloyd’s of London, and Willis Group (all based in the UK), and CNinsure (China). The global insurance industry, which includes carriers as well as agents and brokers, generates about $5 trillion in premium volume each year.

The health and property and casualty segments have seen the strongest growth in recent years, according to Aon. The US insurance agencies and brokerages industry include about 132,000 establishments (single-location companies and units of multi-location companies) with annual revenue of about $120 billion. Demand is related to consumer income and commercial activity.

When the economy grows, so does the demand for personal and business insurance. When the economy contracts, as it did in the late 2000’s, demand for insurance falls (and despite that contraction the Company thrived~). Despite the prominence of large companies in the commercial segment, the US industry remains highly fragmented: the largest 50 firms only hold 25% of the total market. The profitability of individual agencies depends on effective marketing, client referrals, and customer service.

Major insurance products sold by agents and brokers include property and casualty (P/C), health and medical, and life. About 60% of industry revenue comes from commissions on property and casualty insurance, split between commercial (30%) and personal (30%) lines. Commissions on the medical insurance account for about 15% of industry revenue, and life and accident insurance accounts for another 10%. Other types of insurance sold by agents and brokers can include annuity and title insurance.

Product Segmentation by Revenue – Census Bureau