MANAGE MARKETING & LEAD
2 . Agencies are performing better than expected . Most of the agency owners we talk to are optimistic about business . Some markets such as hospitality , entertainment , and transportation are indeed suffering , but agencies rarely have all of their business in one industry . Looking at the numbers compiled by Reagan for the industry as a whole , we can see that agency sales velocity , organic growth , and profitability have all been stronger than expected .
3 . Agency values have held up extraordinarily well . Despite most other service sectors in the economy being battered by the pandemic , there hasn ’ t been any real deterioration in agency cash flow and related agency values . Prices haven ’ t dipped . Well-run , wellpositioned agencies are always in demand , now more than ever .
4 . Markets are hardening for some lines of business . This provides a built-in cushion for agencies . While agencies may be writing fewer policies , those policies are commanding higher premiums , which means enhanced commission income .
5 . The economy is holding steady . Unemployment is quite high in some sectors , but GDP appears to be rebounding . Consumer spending has picked up in the goods sector with the hope of a steady rise in the larger services sector . The housing market has been a bright spot , with first mortgages and refinance loans off the charts . Construction also is holding up .
6 . The demographics of agency owners haven ’ t changed . Owners are still getting older , and that means more agencies will be changing hands . Lowinterest rates make these transactions even more appealing . The pandemic is also motivating sellers who ’ ve been sitting on the fence . With valuations and prices holding up , these owners have decided to call it quits sooner rather than later . They ’ ve grown weary of the current uncertainty and want to cash out .
7 . Cash flow always reigns supreme . Predictable ,
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