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January 2020 | General Insurance

Geoff Hall: Endings and new beginnings?

Geoff Hall is chairman of Berkeley Alexander

The start of a New Year always turns thoughts to resolutions and new beginnings.

It may feel counter intuitive to be planning exit strategies when your business is still in full swing, but in truth a good exit strategy is a vital part of ensuring your business plan continues to perform right to the bitter end.. and beyond, depending on the plan.

EXIT PLAN

Make sure you have a plan in place long before retirement becomes a reality. The key is simple, you need to make sure your business is worth something when you exit and start discussions early – don’t leave it until you need to make a fire sale.

Put customer service first. Customer reviews and brand perception are such an important asset as is evidence of long-term customer loyalty/retention and repeat/cross sales.

FUTURE INCOME

If you can manage the transfer to the purchaser, perhaps by working within the new business for a while to help retain clients and get them used to the new brand, this will help as often the value of your business is based on the expected future income rather than past income.

Also, don’t lose sight of how GI and protection income can add value. Whilst of course the main value is in your financial services income, GI and protection income is a scalable and credible way of creating value now and into retirement.

Develop a good insurance book and talk to your GI provider about how they can support post retirement income as often there is more value in you retaining the commission income on GI into retirement rather than a one-off upfront sale.