When two or more insurance companies come together in a merger or acquisition, it can bring bold ideas and fresh perspectives to the new entity. That can translate to cutting-edge technologies, improved practices, and better ways of doing business for customers and the combined workforce.
If done right, insurance acquisitions can be an exciting prospect for forward-looking organizations.
Defining the Landscape of Personal Lines Insurance M&A
Mergers and acquisitions are common across a variety of fields and industries. Two leading reasons companies decide to combine forces are to increase market share and reduce costs. That’s true of insurance M&As as well, but it’s only the starting point.
Historical Context: How M&As Have Shaped the Personal Lines Insurance Industry
Insurance companies have merged and acquired smaller companies for reasons not much different than the motivating factors that have spurred the same activity in other sectors of the U.S. economy. The move can grow the business, add markets, and reduce operating expenses.
The year 2021 was a hallmark for M&A activity in the insurance industry, with Deloitte reporting a record 869 deals worth a combined total of $57.5 billion.
Unpacking the Benefits of Mergers and Acquisitions for Innovation
A merged enterprise doesn’t just mesh office buildings, websites, and computer networks. Shared ideas and core changes throughout the larger enterprise can result in multiple benefits for customers and workforces.
Expanding Service and Coverage Through Integration
Insurance agents generally have defined service territories. Their geographic footprint tends to be relatively small. But when they join forces with other agents and a parent company, they’ve expanded the footprint of the company and their area of operation. This can be for the greater benefit of all parties.
As an independent broker, joining a larger and innovative company can mean adopting a winning brand with a loyal market. Your insurance business will be empowered to access broader markets, greatly expanding your reach and recognition. Customers know they’ll receive the same level of trusted service when seeking out an agent under the same umbrella, even if they’re located in another city or state.
The Driving Force Behind Cutting-Edge Solutions
Wise corporate management knows that they don’t have all the answers. In the case of well-run personal lines insurance brands that frequently acquire smaller companies, they know they’re embracing fresh idea generators and innovators that inspire insurance innovation, not just the customer base of those businesses.
This means that the parent company has, in effect, imported new ways of addressing challenges and seeking opportunities. Smart management will encourage their newly acquired innovators to share their ideas and help the larger company evolve. It’s in everyone’s best interest.
Navigating Potential Pitfalls in Merged Realms
While some acquisitions are quick and simple, others take place over an extended timeline. Answering questions from anxious employees is paramount. How do workforces combine, and who does what? Who reports to whom? And where? Entire departments might feel threatened or left out of future plans. The rumor mill goes into overdrive.
And what comes after the M&A deal is closed?
Total transparency on the part of top management can be your best solvent against the unavoidable nicks and dents to employee morale. Communicate frequently with the combined staff, fully answer questions, and get as far ahead of strife as possible.
This involves a great deal of pre-planning so that by the time the merger or acquisition is announced internally, there are fewer areas of confusion and concern.
It’s also important that those who planned and carried out the merger or acquisition can answer the most basic questions: Why was this move undertaken, and how will it affect us now and in the long run?
The Future of Personal Lines Insurance Post-Acquisition
The merger or acquisition that brought insurance companies together might have been a huge and complex undertaking, but it was only the start. It’s with the merged talent and thinking that innovation begins.
Maintaining Momentum in Innovation and Growth
From the perspective of an independent agent or the owner of a smaller company allied with a bigger insurance brand, the future is now. Learn and adopt new and more innovative technologies to attract and keep customers, as well as processes and procedures that will boost revenue and improve your bottom line.
The new venture is also a time to share your innovative thinking as you become part of a winning organization that values your talent and contribution.
Learn More About the Acquisition Process
There are tremendous growth opportunities, innovative developments, and competitive marketplace advantages when two companies come together. That’s the start of what you can gain in being acquired by Confie, the nation’s number one personal lines insurance company.
Start the M&A conversation with Confie today. Call us at (714) 252-2500 or contact us online. Let’s merge our innovative thinking, our winning culture, and our forward-looking ways of doing business.
