Do Your Due Diligence Bankers should look for the following characteristics when evaluating potential independent agency acquisitions:

Strength and continuity of management. Insurance is a personal business, and most customers know the agency owner personally. If the principal leaves, many customers could follow.

Banks must give the principal incentives to stay after the merger. A long-term employment contract is one ingredient. Adequate compensation is another. If the agent can make the business grow and unleash the potential of the merger, compensation should reflect that. (Keep in mind that it's a lot cheaper to pay more for success than to lose a top-notch agent.)

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