Thought Leadership

BroadStreet℠ Focuses on Building Agencies for the Long-Term

When insurance agencies seek succession for their businesses today, one of the likeliest prospects they face is being acquired by a firm backed by private equity that has a specific date in mind to “flip” the agency for a quick profit in the future.

It might be 36 to 60 months, but the acquirer has a clear focus on cutting expenses and driving the agency’s margins up in order to increase the eventual sale price.

Usually that means eliminating staff, not hiring new producers, and reducing other expenses. While these expense reductions might improve short-term profitability, they also end up degrading customer service, hurting agency morale and impeding business growth.

In our business, the biggest expense by far is compensation for employees and producers. When you start cutting those expenses, it immediately impacts the long term health of the organization.

When each subsequent generation of private equity firm steps in, it tries to become even more “efficient” than the one before. It’s so overwhelmingly tight, and what happens is that business and employees start falling away.


No Intention to Sell

We love competing against these firms because at BroadStreet℠, we take the opposite approach. We invest in high-performing agencies without the intention to sell those businesses – ever.

We partner with agents who still want to work to grow their businesses. We want to keep their agency in its current form with partners who have operational autonomy. Together we focus on long-term agency growth (acquisitive and organic) and we live that every day through our actions and decisions.

We start with having our priorities straight. Together with our partners, we focus first on the customer, second on agency staff and producers, and third on the overall business.

With our priorities straight, our partner agencies can continue to provide outstanding customer service while growing organically and through acquisitions. (I’ve written previously about our strong bank facility that provides our partners with ready access to capital for their acquisitions.)


There are many elements to building businesses over the long-term. Here are three important factors:

Serving Customers’ Needs

Our lens for decisions is to make sure that we contribute to meeting the needs of the agency’s customers. Every day you’re faced with making decisions that aren’t going to be profit driven: particularly hiring new producers and making capital expenditures that don’t provide a quick return. These are the necessary long-term investments that build a stronger agency.

Hiring Producers

Insurance industry CEOs will tell you the number one problem is getting new people into the insurance industry.

At BroadStreet℠ we are constantly bringing new people into the industry. We actively look for and hire new producers. Over the past few years we’ve added hundreds of new producers and we partner with insurance carriers who assist us with training new producers.

Private equity firms running on tight margins don’t hire or train new producers in their agencies.

Building Centralized Infrastructure

To eliminate administrative burdens and extra expense for our partners, we centralize our investments in infrastructure. This allows our partners to stay focused on serving their customers’ needs.

For example, we support our partners with investments in technology, data analytics and auditing.

We also remove expenses and reporting requirements that our agencies would normally have. For instance, we centralize our partners’ 401(k) fiduciary responsibilities and Affordable Care Act reporting. We also provide tax reporting, legal counsel and acquisition due diligence support for our partners. These can be administrative nightmares for individual agencies because they are labor intensive, and require expertise that distracts from the main goal of revenue production.


These are important factors for agency owners as they consider the future of their businesses. They should go in with their eyes wide open: a deal with a firm backed by private equity means that their agency will be the focus of cost-cutting to improve margins for a “flip” sale within 36-60 months.

In contrast, for agents who want to continue to work and grow their agencies, we ask you to consider BroadStreet’s℠ approach.

It’s your agency and your choice. Please contact me to learn more about BroadStreet℠ and our focus on the long-term growth of our partner agencies.

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