M&A: Did You Get a Lemon?

Using AgentSync to Vet Your Insurance Acquisition

Mergers and acquisitions continue to be a hot topic in the MGA space (and, frankly, the insurance industry on the whole). 

If you’re in the business of acquiring businesses in the insurance and financial sectors, there’s a moment after signing the paperwork that you may find yourself holding your breath. It’s the moment of truth, where you find out whether the investigating, the haggling, and the negotiating will pay off for you or whether you’re going to be left with flat party balloons.

It may be days, weeks, or even months before you can truly tell whether the acquisition will be worth its salt. But with AgentSync, often that waiting period is significantly shorter. Effectively, with AgentSync’s suite of products, you can understand in short order whether you’re driving a proverbial lemon off the lot.

Of course, this isn’t meant to be promissory, and you should always do your due diligence before making an investment in acquiring any sort of insurance-adjacent business. But following, let’s look at some of the tools that AgentSync has to help you vet exactly how much rehabbing you might have to do on your new business.

Single bulk uploads

When you began the valuation process, you likely had to have at least a cursory understanding of how many downstream agents were writing for the agency or MGA you were looking to acquire. But merging them into your existing book of business in a manual system is a nightmare of data entry. 

With AgentSync’s bulk upload function, it’s a matter of drag-and-drop, instantly pushing the national producer numbers (NPNs) to sync with the records maintained by NIPR. If you have a .CSV or .XL file with more detailed data, you can create thousands of records at a time.

Each system change creates the potential for mistyped and mismanaged data, but by using AgentSync Manage’s bulk upload function, you’re ending the repetitive data entry that leads to many of these errors. An acquisition sometimes represents months of checking and doublechecking work between teams that may be undergoing the emotional work of figuring out new processes and working relationships. In the case of migrating agent and agency records with Manage, though, it’s a matter of scrubbing data and then moving on – no dropped records and no double-work.

Through the sync with NIPR, you can also see how accurate your acquisition was in record-keeping, or if they did any at all. If a plurality of records are flagged with missing or error-filled information (think producers with incorrect addresses or missing appointments), you might be able to get an early sense of whether your new business was previously running slapdash operations.

AgentSync Scorecard

For agencies, carriers, and MGAs with Scorecard, soon after bulk onboarding your new agent lists, you’ll have a real-time feed of how much regulatory risk your new acquisition has brought you. Scorecard gives you a single snapshot of whether agents are up-to-date on licenses and appointing in the relevant lines of authority. You won’t wonder how effective your new business’s operations team was at managing producer license compliance. You’ll know.

Scorecard can also break this down based on who “owns” the record. If agents’ records were assigned to specific team members, you will be able to tell whether an out-of-compliance record is a one-time exception for an otherwise stellar ops member, or whether a single team member needs further training over compliance practices, or whether the previous organization maintained a culture of poor training and bad compliance hygiene.

But not to fear! Even if several agents are missing licenses, you can also mass-apply for licenses and appointments in all the states that allow transactions through NIPR directly from the Scorecard dash. And, even better, Scorecard won’t process transactions for agents that aren’t eligible for appointment/license applications. For instance, if an agent’s license has lapsed in a state, Scorecard will alert your team that you can’t successfully submit an appointment for that agent until their license is in force. This saves you money by ensuring you don’t pay nonrefundable fees for ineligible agents.

Seeing at-a-glance data about whether an entire set of agents from an acquisition are in compliance with licensing and appointment regulations can be an instant validation of your purchase … or a naked unveiling of how much operational work you’ll need to do to bring your new organization into alignment.

Agent portal

M&A activity can be jarring for the producers who work downstream of whatever partner is being taken over. Having an external portal for agents and agencies to get some sense of connection and explore new functionality can allay fears about what their work will look like moving forward. Switching over new agreements and contracts with these agents is more easily done by integrating a legal contracting software with AgentSync’s producer portal automation, so reminders and notifications can be hands-off.

Again, this is an area where you can see any red flags regarding the way your acquisition was previously run. Any business will experience a few agents who are unresponsive or difficult, but agents who largely don’t interact, ignore alerts, etc; or, conversely, an agent force that inundates their producer portals with numerous corrections and submissions can both be harbingers that your team will need to do a bit of remedial work.

Of course, the benefits that make AgentSync valuable for being in the position of acquiring a new business also make it attractive for those who are in the position of selling. Verifying that your organization’s team is in compliance and underscoring just how broad your reach is with hard data can sweeten your business valuation. 

No matter what side of the table you’re on, though, for helping you smoothly transition through every stage of an insurance M&A, see what AgentSync can do for you.