2022 Best Practices Study

concepts are often intuitive, but consistent execution is challenging. Can you paint a vision of a firm that makes people its number one strategic priority and maintains a culture of teamwork and independence? If your employees buy into the vision, are they willing to follow you and help you achieve it? There is no substitution for effective leadership, and rarely does a firm prosper without it. We would be remiss if we did not acknowledge a few other surprises in our CEO survey and the Private Ownership Study . Technology may be the second most discussed topic in the industry next to the M&A activity, yet it was ranked seventh out of ten as an element critical to remaining privately held. In addition, capital structure, the focus of The Private Ownership Study, ranked ninth out of ten. Why the low rankings?

With unlimited capital and the right people, can you forever prosper as a privately-held firm?

Yes 93.0%

Source: Reagan's Private Ownership Study

M&A activity is not slowing, and neither are the other competitive pressures in the industry. As a result, the challenges of prospering and remaining an independent agent or broker show no signs of abating. However, we believe that there is a bright future for independent agents and brokers. Even at the high M&A multiples, the long-term financial benefits of a prospering, privately held firm, outpace the financial benefits received from an M&A transaction. The industry's remarkable performance during the pandemic was yet another confirmation of the importance and relevance of the independent insurance agent & broker ecosystem. Almost three decades of adherence to a Best Practices mentality of continuous improvement undoubtedly helped the industry weather the storm. Rather than resting on their laurels, Best Practices firms must re-double their efforts to tackle the industry's issues and prepare for whatever the future holds. Conclusion

Capital Structure

People: People, Culture and Leadership

There was a question in our Private Ownership Study survey that may offer some insight into the role of technology and capital structure in remaining private. We asked the participants, "With unlimited capital and the right people, can you forever prosper as a privately held firm?" Ninety-three percent of the respondents said, "yes." Clearly, most leaders feel that, with adequate capital and the right people, any technological challenges can be overcome.

Critical Issues Facing Agencies

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