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How to Best Notify Clients of an Agency Acquisition

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Insurance agencies get acquired for many reasons. Often, an agency owner is ready to retire. In other cases, one agency may want access to another agency's markets. Sometimes two agencies merge because together they have more market clout with insurers and prospective clients than they do separately. Occasionally, an agency in financial trouble will seek a buyer. Regardless of the reason, the acquiring agencies face many issues. Among them is one that can make or break the success of the merger: When and what to tell the agencies' clients. When making those decisions, keep these guidelines in mind. 

When to Notify

Sooner is better than later. Unless the buying agency is going to retain both the seller's name and staff, a delay in notifying clients risks catching them by surprise. Clients who stumble across the news of the change while adding a car to an auto policy will not be pleased. Inform them no more than two to four weeks after the deal closes. It might be a good idea to give key clients the news earlier than that, perhaps even before the closing in certain situations.

Who Should Notify

Ideally, both the selling and buying agencies should communicate with the seller's clients. If the contract prohibits the seller from contacting the clients separately, send a letter signed by both agencies. If the contract allows, an alternative is an initial letter from the seller, followed by a letter or phone call from the buyer.

Key Accounts

Identify those commercial and high-value personal clients and then strategize with the seller on how best to tell them about the change in ownership. Rather than sending a letter, the buyer may want to call key clients or pay them a personal visit. Paying a personal visit can go a long way in preventing attrition of these key accounts.

The Notification

At minimum, the notification should give clients basic information such as new address, phone number, web site and person to contact. It’s always best to use the term “merger” rather than “acquisition.” Consider publishing a newsletter with the merger as the main topic. Personalize it by including staff photos and articles about the local community and insurance issues. Emphasize to clients how the merger will benefit them. Talk about new products and services that the agency will be able to offer. Assure them that the change does not require any action on their part. It’s probably best to send the notification via regular mail. Sending out an email has its issues for an important notifications like this. This includes not having all email addresses, also some may not receive it or open the email.

M&A Details

Beware giving too much information. Clients want to know how the change will affect them. Most of them are probably not interested in the specific details of the deal. Tell them instead about the positive changes that will occur.

Involvement of the Seller

State clearly what the future involvement of the sellers will be, whether they are stepping away from the business or staying on. Whichever the case may be, keep the message positive. Clients will need reassurance that they are in good hands, whoever will be handling their business.

Tread Lightly

If there will be material changes over time, avoid telling clients about all of them at once. Give them time to adjust to the merger, then reveal changes as they are scheduled to occur. 

It is inevitable that clients who have done business with one agency for years will feel unsettled by a merger. If both agencies handle the notification process properly, they can hold onto most of those clients and set the stage for future growth.

Looking to start an Agency? Get detailed information by reading our Guide to Starting an Insurance Agency

 

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