PRIVATEEQUITY

Additionally, buying a book of business, particularly one that adds a specialty, can make sense for increasing market share, adding a growth platform and building cash flow.

Also, a side effect of the flurry of PE buyers over the past several years has been upheaval for producers now working for PE-owned brokers. Some producers might be less comfortable in their acquired agency environment than they were before it was purchased. This talent may be good candidates for principals to recruit to their firms. And, rather than selling your agency, a staged perpetuation may be a great option to consider.

While borrowing has presented challenges for PE brokerages, agency owners should not be afraid to borrow even at the current, higher interest rates if the use is for productive purposes such as acquiring an agency or a book of business. Refinancing debt at a floating rate provides an opportunity to borrow. There may be an opportunity to fix your interest rate to one that is lower, saving interest and improving cash flow.

Increasing interest rates might have put a pause on PE buyers, but they have also created an opportunity for agency owners with vision and the courage to act.

Robert Pettinicchi is the executive vice president and chief lending officer for InsurBanc, a division of Connecticut Community Bank N.A.