Agency Acquisition Due Diligence Checklist

Insurance agency mergers and acquisitions are expected to increase as the economy continues to improve and the continuation of the soft insurance market limits internal and organic insurance agency growth. In addition, the threat of an increase in the capital gains rate will provide further incentive to owners of agencies to sell and lock in profits at a more favorable tax rate.

With the expected increase in agency merger and acquisition activity in mind, we have prepared a condensed diligence check list for the acquisition of an agency. The checklist is intended only to spur thought and discussion of some the considerations necessary when acquiring an agency. It is by no means an exhaustive listing of all things that must be considered and reviewed before acquiring an agency. If a purchaser is interested only in purchasing certain assets from an agency, then the diligence process can be streamlined since the purchaser will not also be acquiring the agency's