By Timothy J. Cunningham and Daniel P. Menzer, principals, OPTIS Partners LLC

The economic turmoil of the last few years, compounded with the lingering soft market, has affected the value of virtually every insurance agency. While some have created incremental value despite market conditions, most have experienced a decline in value. But without a formal assessment of the risks, projections, and current balance sheet of the firm, you can't ever know how your agency and your investment are weathering the storm.

A fair market valuation (FMV) is a thorough review of a business's financial and operational attributes, performed by an independent financial expert. The FMV takes into consideration the inherent risks of the general marketplace as well as the specific risks of the particular firm.

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.