ABCs of Acquisition

THE DECISION TO GROW

So, you are committed to growing your business. The first question is how? Many brokers face the choice of whether they wish to grow organically, by increasing their sales internally, or inorganically, through a merger with or acquisition of another company.

Given the high price tag associated with the M&A option, the average brokerage is often looking to drive growth organically to increase the size of their book. If you look at statistics from the Insurance Bureau of Canada since 2012, you will see that property and casualty insurers in Canada have averaged an increase in net premiums written of between 0.8% and 3.6% annually over the past five years. In this kind of low-growth environment, finding a lot of new customers organically may also be known as “unicorn hunting.”

Once you have made the decision to grow organically, you need to have a few financial key performance indicators (KPIs) to avoid surprises. These are your Conversations, Conversions, and Cancelations.

Read the full article in the Digital Edition of the May 2018 Canadian Underwriter.

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Adam Mitchell, President, Mitchell & Whale Insurance Brokers