We firmly believe that there is a generational shift in the insurance industry. Agency owners are looking for a perpetuation strategy and want something different than what most transactions offer in the insurance mergers & acquisitions marketplace today. 

While the industry turns to private equity and other means for succession, retaining the independence of the retail agency system is vital to the market.

Many acquisition strategies will highlight the concepts of retaining identities, ensuring legacy, and taking care of clients and employees. However, truly focusing on these concepts is becoming less and less common in agency perpetuation.

This is an opportunity for independent agencies seeking growth—much like we were and are. We're uniquely positioned to be intentional about our independence and leverage it to serve a void in the market.

Independence is the very foundation of our business. That's why we had no issue going against the grain compared to other potential acquirers when we began the process of acquiring Hatcher Insurance.

When we acquired Hatcher Insurance, we started with an initial approach to the idea. This led to more frequent and casual conversations about philosophy, a potential deal and operating structure. Then, we ventured into fact-finding, learning more about agency personnel, clients, and carrier relationships—and then a more focused conversation about the actual framework.

We were fortunate to have had a long-term relationship with the agency principal's family. However, even if you don't start on this note, a crucial element of the acquisition process is finding a strong alignment on mutual goals to build something special.

Here are the lessons we learned as we completed the transaction without sacrificing the entrepreneurial spirit of the independent agency.

1) It isn't just about the numbers. Each partnership opportunity and agency principal have a unique set of circumstances and finding a healthy balance between accomplishing both their perpetuation goals and our growth strategy is key.

We learned that this can be a very emotional process. In most cases, the opportunity represents someone's life work and even sometimes a multi-generational family business.

Never treat it like a transaction. Rather, approach it with humility, patience and a human element. It takes a considerable amount of time to build a relationship grounded in trust. Communication was paramount—there can be no secrets on either side.

You need to understand as much as possible about the existing firm both past and present, and the agency principal needs to understand where exactly you believe you are headed.

2) Keep the seller's legacy intact. In our case, this family had a rich history, and it was to both of our benefit to preserve that. We never lost sight of the fact that they had a choice of who to partner with before they chose us. This was both humbling and reaffirming that what we were doing would resonate with agency principals.

We also wanted to provide a family atmosphere and career opportunities for the existing employees, making them understand that we had a firm grasp on the culture and future of the organization.

3) Keep an open-minded, partnership-driven approach. Going forward, our strategy includes several agency partnerships. We currently have four additional opportunities in the pipeline—all at different stages in the process.

We believe what really resonates with the groups we have engaged with is the fact that we do not have a specific formula or process for partnerships, but instead treat each opportunity as unique as the agency itself.

Our industry—and many others for that matter—is in the midst of a tremendous generational shift. This, accompanied by the consolidation trend of retail agencies and brokerages, as well as administrative tax changes, has created an incredible opportunity for the next wave of insurance agency owners and staff who wish to participate in an agency's direction and future.

Billy Palmer is managing partner and Bryan Robertson and Cory Broadaway are partners at Hatcher Insurance LLC in Orlando, Florida.