It never hurts to be prepared, particularly when you’re considering a partnership or other merger. If you’re thinking about entering a relationship with a bank, this document by Fred Dent will help you gather the information you need to have a meaningful conversation.
An insurance agency will encounter many issues and problems when developing a relationship with a bank. This article outlines the information you should prepare to provide a bank prospect. It’s a simple, self-explanatory form. If you’d like more information, please see the contact information at the end of the article.
When developing the information, be sure to mark each page with this confidentiality notice:
CONFIDENTIAL DRAFT FOR DISCUSSION ONLY
- Please list the management skills that the Agency principals and managers have demonstrated.
- Outline the skill levels and productivity of your Agency’s personnel. How many CLU, CPCU, ARM, MBA, CPIW, and CPIC designations do your agency personnel hold currently?
- Describe the historical growth of the Agency and any current trends that you’ve identified as meaningful.
- Identify other agencies that you perceive as the most competitive, and the areas in which they excel.
- What is your general spread of business in terms of Commercial and Personal (number of clients, etc.)?
- Please discuss the mix of products you provide in terms of industries you serve currently.
- What is your Agency’s underwriting authority and claims payment authority (by company)?
- What is the status of any litigation?
- What is the status of any IRS issues?
- Discuss your ability to configure coverage and to provide quotations.
- What data processing systems do you use? Do you anticipate any future changes?
- Tell us about your marketing efforts.
- Tell us about your sales management, follow-up, success, and ability to maintain relationships.
- Are you on the Internet? If so, what is your Web site URL? What results have your Internet activities produced?
- Do you provide Internet quotations? Can you issue policy binders via download or printing?
- If not, do you anticipate this capability in the near future?
- Tell us something about your locations and the resources you have at these locations.
- How would you envision the relationship working?
- What are you willing to do to support the venture?
- What compensation would you propose? For what periods?
- How would you structure an agreement?
- What do you envision as the length of the agreement? What renewal issues should we discuss?
- Do you have any specific concerns to address up-front? If so, please discuss them.
- Are you familiar with the current rules, regulations, and laws that govern banks selling insurance? Contact your attorney to secure up-to-date copies of applicable laws from the Commissioners of Insurance and Financial Institutions.
- What is your history of contingent commissions? Identify profit sharing and contingencies you’ve received during the past three years (by company).
- Please provide financial statements and tax returns for the past three years.