Selling an insurance broking business

We are seeing increased activity in the sale of privately owned insurance brokers.

The most common reasons include:

• Limited organic growth, coupled with significantly increased operating costs.
• Many insurance broker directors are approaching retirement, while the next generation may lack the funding or appetite to take over the business.

Buyer likely to try and negotiate staged or deferred payment

Where staged or deferred consideration forms part of the deal, buyers may seek to reduce the final purchase price through:

• the extent to which the seller remains involved in the business after completion;
• the impact of an economic downturn; and/or
• provisions linking deferred consideration to profit levels, which may be affected by the buyer’s decisions after completion.

Where an earn-out is proposed, we negotiate firmly on the key commercial terms, identify the points of leverage and seek to close gaps that could leave sellers exposed.

Regulatory issues when selling insurance brokerage

Selling a regulated business such as an insurance broker can involve more detailed and costly due diligence. This is particularly relevant where the broker has relationships with self-employed representatives and agents, or operates commission and referral arrangements. These factors can complicate the sale and require careful consideration.

Specialist solicitors for selling insurance broker business

Our experience with these transactions enables us to focus quickly and cost-effectively on the key issues, helping to save time and money. Although this page focuses on selling privately owned insurance brokers, we also assist buyers of insurance-related businesses.

We are happy to discuss your questions and provide an initial scope of work for buying or selling an insurance broker. Please contact us on 020 7438 1060.