Search
 

For The Manager: Common causes of low agency valuations

The thing I like least about my work is delivering unexpectedly low agency valuations to agency owners. Most handle the news well, but it still is difficult to tell them that they have not built valuable agencies. The upside for these owners is that

By Chris Burand | Updated on May 31, 2006

The thing I like least about my work is delivering unexpectedly low agency valuations to agency owners. Most handle the news well, but it still is difficult to tell them that they have not built valuable agencies. The upside for these owners is that they can use this knowledge to increase their agencies’ value, and the result inevitably is a smoother-running, more profitable agency.

A handful of owners, though, do not take the news so well. Most have achieved high incomes for many years, and issues that negatively affect their agency’s value have not (seemingly to them, at least) adversely impacted their earning power. If their incomes are high, they seem to reason, how can their agencies’ values be low? In many cases, the owners simply have been lucky that certain factors have not taken a heavier toll. In others, especially with small agencies, the impact often isn’t realized until a valuation or sale has been initiated.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2024 ALM Global, LLC. All Rights Reserved.