What is your strategy for acquiring a company?

Some agency owners have been in the business 25 years and they are tired. They don’t have a perpetuation plan and they’re looking to exit, and we give them that opportunity to cash out. And there are others who have taken their company to a certain plateau and they’re looking to get to the next level. To do that alone may be impossible or require them to take on debt and more risk. These agencies can partner with us and stay on. We have a program that allows them to grow both organically and through acquisitions using our capital as we help them take their company to the next level.

What makes an agency appealing?

Agencies that are fold-ins and in the business for a number of years. They have a solid book of business and a good reputation, so we are able to acquire them and fold their book into our existing infrastructure. We have a hub and spoke model. When we’re entering a new geography, we’re looking to partner with an agency owner, an entrepreneur, who has the infrastructure and wants to stay on and be our hub in that specific market. We’ll look for an agency that has the infrastructure to be on our platform, the infrastructure to grow both organically and through acquisitions.

If there’s a good agency that’s well run with a good management team, we’d love for them to be part of the Confie team, regardless of where they’re located. That’s a real key for us. We’re looking for good people.

What is the private agency culture that Confie is looking to attract?

The privately held agency culture is a very entrepreneurial culture with a commitment to putting clients and colleagues first. This very culture is what has led to these firms experiencing great success, client attraction and continued growth in market share.

How is Confie planning to build its organizational structure?

Confie will operate under a hub and spoke model to enable “platform” acquisitions to grow both organically and externally, through “fold-in” (add-on) acquisitions

What are important factors to be aware of during the acquisitions process?

Disgruntled staff: Disgruntled employees can make a transition difficult and are considered a risk in the eyes of the buyer.

Speed of sales: Evaluate your growth rate. A business that is growing at a faster rate is more valuable than one growing at a slower one.

Ownership status: Producers’ contracts need to be locked down ahead of time, so make sure all contracts are in proper order. You need to make sure you have contracts in place that have restrictive covenants. Producers may have some kind of deferred income interest in the book, but the ownership of the accounts needs to be made clear.

Organization of records: Keeping good records, both of the finances and the book of business, is key. Cluttered and disorganized records impact value.

Why focus on acquisitions rather than organic growth?

Consolidation has always been a proven strategy with an insurance brokerage. We’ve found, especially regarding personal lines, there are a lot of economies of scale, a lot of advantages the bigger you are. The two things you need to grow today are scale and resources.