Protecting Independent Agents' Legacies

Doug Witcher | November 2, 2021

Doug Witcher, CEO of Smart Choice, a network for independent insurance agentsOne of the primary reasons so many agents choose to go the independent route is the freedom it brings – the freedom to manage your own life and business, and the freedom to build something on your own terms. It’s very different from running an agency in the captive world with all if its restrictions and requirements – and you have more decision-making capabilities when it comes to your clients and growth targets.

Running your own business is a little like raising a child. You go into it with uncertainty and spend years putting your heart and soul into seeing it grow and flourish. So you of course, want to make sure that you have a plan to protect your agency, and someone involved in helping you run your agency who cares about it as much as you do. This includes setting up a strategy for when and if you plan to move on to ensure your legacy is protected.

Over the last several years, the insurance market has seen a stark trend of private equity driving mergers and acquisitions in the agency world. This is partially driven by aging population in our industry. It’s no secret that the average age of agency owners in the U.S. has been rising for some time – a trend not necessarily unique to the insurance industry. In fact, according to the U.S. Census Bureau1, the baby boomer generation will outnumber children for the first time in U.S. history by the year 2030, putting almost 20 percent of the entire population at retirement age.

Furthermore, according to a study2 done by Future One in 2018, four out of ten agencies expected to experience an ownership shift in the next five years, with over 76% of those planning to pass ownership to a family member or internal producer.

This means the opportunity is ripe for younger agents to consider acquisition as a growth strategy, and for current agency owners to groom a new generation of agents to continue handling insurance and risk management for customers in a responsible and personal way.

Regardless of how and when you choose to retire, it’s imperative you establish a solid perpetuation plan for the agency you’ve worked so incredibly hard to nurture and build. Smart Choice has always been dedicated to the success of the independent agency marketplace because it ultimately delivers insurance to the customer in the most personalized way. Mitigating risk for the population holds an important place in the financial world, and agents being involved in a personal way with their clients is the best way to successfully achieve this. As a company, we want to assist you in creating these plans in any way we can – whether that means offering mentorship and advice, or helping you identify opportunities when you reach that crossroads.

As a longterm partner for growth, we are sincerely committed to helping agents develop perpetuation plans and ultimately, protect their legacy.

Cover of the 2021 Issue 6 Smart Choice Magazine titled "2021 Year in Review"2021 Year in Review

Even though we turned the calendar on 2020, the pandemic lingered, and so did the obstacles for many industries, including ours. Yet Smart Choice, our agents and carrier partners all worked together to hit some amazing milestones and put together another great year in the books. Check out the 2021 Issue 6 of Smart Choice Magazine for all of the milestones and achievements of 2021 and what we have to look forward to in 2022 (hint: there's a lot!).

Read the Magazine