Establishing a fund to roll up smaller property and casualty insurance agencies. There is a lot of M&A and PE activity surrounding large brokerages but very little action for smaller 1-2 man brokerages. These agencies bring in $150,000-750,000 in gross annual commission operating with net profit margins over 50%. We plan to combine and streamline multiple smaller agencies into one entity that is large enough to get interest from the big industry players.
There is a lot of opportunity to buy small agencies because traditional insurance lenders tend to avoid anything under $500k and they take 3-4 months to close a purchase. The best deals are found with owners that need to sell quickly due to health or family reasons. Most agency owners are 65+.
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