Anyone with experience in Canadian insurance brokerage firms?

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May 09, 2024

by a searcher from Queen's University in Kelowna, BC, Canada

I'm considering buying a couple small insurance agencies (franchises). Would appreciate if anyone has insight into where this space is going and some things to watch out for. This is an opportunity based in Canada, so guessing Canada-specific advice will be much more relevant.


Appreciate the help!



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Reply by a searcher
from Bowling Green State University in Surrey, BC, Canada
If they are in B.C., be cognizant of the ongoing disintermediation of ICBC enabling car insurance renewals directly on their website. I think B.C. has legislated a transition plan wherein brokers will continue to receive fees for a period of time, but the period will eventually end.
More generally, I think what you're seeing play out with ICBC would be my caution in this space - potential channel disruptions.
That said, brokerages tend to trade at high-ish multiples due to their low capex, high recurring revenue nature. Yet, also pretty competitive at the retail level with low differentiation, so you'll want a killer sales and relationship management focus.
Roll-ups are common so provided you run the businesses well, an exit should be likely down the road.
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Reply by a searcher
from Indian Institute of Technology, Delhi in Toronto, ON, Canada
yes I have been looking at the space as well and preliminary understanding is same as what Stefan mentioned. It is saturated with buyers and any small insurance agency already has an interest showed to them by large well known buyers, and it makes it difficult to find a well priced deal. But ^redacted‌ send me a DM and let us chat more on what you are seeing in the market.
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