With no end in sight to the soft market, the question that agency leaders must ask themselves is: “Are we going to play offense or defense?” The answer is going to depend on the agency's situation, and everybody's situation is different.
For the public brokers, they must maintain their earnings or they will be penalized by Wall Street. Therefore, they will turn to acquisitions to drive earnings growth and focus on cost containment strategies. Private equity firms are also under pressure to generate the same level of earnings to satisfy the returns promised to their investors.
However, privately held agencies with no debt are in a much different position. In fact, they have a tremendous amount of freedom and can develop a strategy to capitalize on the soft market.
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