The Personal Lines Market Is Changing. Here’s How Your Insurance Agency Can Prepare

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New research from MarshBerry shines a light on how insurance agency valuations may shift within the next 5 years, and what you need to do to stay ahead of the curve.

At first glance, the subject line of the e-mail seemed innocuous enough: “The Shifting Tides of PL Insurance.”

Still, I clicked on it. Like many of you, I’m a regular reader of MarshBerry’s “Today’s Viewpoint” e-newsletter, a well-composed, thought-provoking series of pieces authored by the thought leaders at one of the top M&A advisors in the industry – a reliable third-party source of market insight.

For several key reasons, however, this entry caught my attention.

Personal lines insurance was the subject here – specifically, MarshBerry’s take on the forces that could alter this market inside of the next five years. In the firm’s opinion, InsurTech, a sector that continues to draw capital investment, will transform the entire P&C industry sooner than you might think – and disruption may be imminent in the personal lines space.

MarshBerry states that independent agency owners don’t have to fear InsurTechs like Lemonade and Root Insurance – yet. While they haven’t even written $1 billion of premium combined to date, if those two players were to maintain their current compound annual growth rate of nearly 50%, that could siphon business away from independent agencies.

What’s more, MarshBerry suggests that in five years, the valuations of those agencies will also be impacted as competition heats up in personal lines. Not all personal lines-heavy smaller agencies will be able to compete.

Think about that for a second. If I’m an agency owner whose book is weighed heavily on personal lines, MarshBerry is telling me that my days may be numbered – or at the very least, that the valuation of my agency will suffer because potential buyers will see that InsurTechs will start eating my lunch within the next five years or so. In which case, why would someone pay me what I believe my agency is worth?

Insurance agencies with heavy exposure to personal lines need to prepare for this new wave of competition, which MarshBerry says presents “a significant threat” to their business. Larger agencies can afford to make significant technological investments in their infrastructure to stay competitive in this segment; however, small-to mid-sized insurance agencies lack the scale, skill and capital to do so.

The piece ends by saying, “As valuations and overall appetite for personal lines-focused insurance firms may have hit a peak, there may not come a better time for owners of these firms to consider selling their businesses.”  

Now, this where I completely disagree with MarshBerry. There’s a better way.

First off, I would bet there’s not a single successful agency principal whose book is heavily weighted on personal lines that would consider selling just because of the threat posed by InsurTechs. If MarshBerry truly believes otherwise, they obviously haven’t spent much time with independent agents. Agents are not dinosaurs. They’re fully aware of the value they provide, and the trusted personal counsel that goes along with it.

However, they’re also smart enough to know that there’s strength in numbers. The bar continues to rise for what agencies need to be delivering to maintain their value proposition, grow revenue and gain a competitive edge. Selling out of concern or even fear isn’t the answer.

Rather, the answer to intensifying competition is to join a network in which you can leverage your strength with other like-minded agencies while remaining 100% independent. The goal is to build more value around your agency, not just to protect it.

The Virtuous Cycle

In past blogs I’ve detailed what I call “The Virtuous Cycle,” in which members of Renaissance Alliance use the tools we provide to grow their premiums and their revenue, and in doing so add value to our network – which keeps our carrier partners happy, as their revenue grows in tandem.

Joining our network, however, provides more than that, especially if your book is weighted more toward personal lines. Competing on the technology front is a key point when it comes to the value of your agency; savvy principals know that they won’t be able to stay competitive without it. The agency-tech benefits of joining Renaissance offer a huge advantage in both speed and ease of placing business – and the wide variety of markets available to our member agencies empowers them to serve clients quickly and with competitive rates.

Plus, if MarshBerry’s projections are to be believed, expanded market access will be needed for agencies looking to write more business in commercial lines. Membership in Renaissance Alliance provides our agencies increased options for the placement of commercial risks to serve a wider spectrum of clients.

Let’s recap what MarshBerry is saying:

  • Independent agencies need better technology to be able to deliver a buying experience that’s just as effective or better than that of InsurTechs;
  • Agencies need to be writing more commercial lines business to balance their book; and
  • In order to write more commercial lines business, independent agencies require access to more markets to effectively place those risks.


Membership in Renaissance Alliance provides all of these things – and much more.

Regardless of your perpetuation plans, increasing your agency’s valuation is critical. If you’re an agency principal and someday you do wish to sell, it’s in your best interest to ensure that the valuation of your business remains high in order to receive the payout you deserve – and that you get to sell when you decide to, not when your hand is forced.

As an independent agent, no one should control your destiny but you.

Kevin Callahan is Chairman and CEO of Renaissance Alliance. Have a question, a comment or want to learn more? E-mail Kevin at

Schedule a 30-minute call now with Renaissance to start growing your premiums and your revenue, and protect your business’ future.

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About Renaissance Alliance

Renaissance Alliance works with independent property casualty agency owners to grow your premium, maximize your revenue and increase the value of your agency through increased profit sharing, guaranteed override revenue and offloading non-revenue generating activities. The net effect is higher revenue, decreased expenses, improved operational efficiency, and accelerated agency growth.


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