Spring 2008 State of the Industry

For the majority, agency value is hanging by a thread. The string is about to break. For the minority that are willing and able to execute a plan to combat sustained soft market conditions through organic growth and strong core operating profi tability, valuations will remain strong and in some cases increase. The widening spread between the many (average value) and the few (high value) will expand and look like the Grand Canyon during the next three years. Unheard of, unforeseen and inconceivable premium valuations have been sustained for so long that most agency owners have long since accepted this utopia as reality. But make no mistake, the confluence of factors that led to sustained high valuations for all agencies is rapidly passing over the industry and the value of the average agency is hanging by a thread. Some will hang on to high value while others will find themselves in a valuation free fall.

For the full article, please download Agency Value: Hanging by a Thread.