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Standards & Guidelines For Appraising Insurance Agencies / Brokerages 2015


Data and Information Sources

The appraiser needs to collect various types of data and information to perform an appraisal. The appraiser should consider the appraisal purpose and knowledge of the appraisal situation to determine the combination of the data sources below that are relevant for a particular appraisal. Some items below are more pertinent to the actual valuation calculations, while others may relate more to the use of informed judgment by the appraiser.

  • Income and expense data (minimum of three years)

  • Balance sheet data

  • Production data for all types of commissions

  • List of all employees by job classification

  • Compensation history

  • Other income data

  • Contingency (company bonus and profit sharing) data

  • Loss ratios (Carrier Production/Loss Documents) for at least three years

  • Producer ownership, vesting and options

  • Ownership options issued to others in the agency

  • Errors and omissions information

  • Errors and omissions prevention practices

  • Errors & Ommissions History (at least five years)
  • Catastrophic loss data

  • Producer or associate contracts, including nonpiracy and noncompetition clauses

  • Contracts with carriers

  • Automation information

  • Data about producers and employees

  • Management information

  • Marketing information

  • Advertising information

  • Basic client demographics

  • Office location information

  • Specialty and niche market information

  • Agency competition

  • Community involvement of the principals and producers

  • Web site exposure

  • Money management practices of the agency

  • Relationships with insurance carriers

  • Large (target) account data and information

  • Agency, producer and employee licensing data

  • Agency insurance and risk management information

  • Background and historical information about the agency and its principals

  • Tax, legal and disciplinary actions

  • Other documents, data and information relating to the agency’s particular situation or status

  • The purpose of the appraisal

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