Is a Partnership the Key to Scaling Your Crop Insurance Agency?
In the heart of central Nebraska, two longtime partners and agency owner’s lifelong friends who met in college built a successful crop insurance business from the ground up. With over $11 million in premium volume and a lean operational model, they had achieved strong profitability. Yet, as they approached their mid-60s, the question of what comes next began to surface.
This is the story of how a specialized crop insurance agency with 70%+ profitability began exploring a strategic partnership not out of necessity, but opportunity.
Agency Background & Pain Points
The agency, headquartered in central Nebraska, operates primarily in Nebraska, Colorado, and western Kansas, where hail damage is a significant risk and a major driver of premium and commission. Founded around 2010, the agency is led by two principals in their 60s, along with their adult children and a small part-time team. The book is composed of roughly 98% crop insurance, with a small but budding P&C component led by one of the founder's sons.
Key operational traits:
- ~$11 million in total premium
- Estimated $900K to $1M in commission-based revenue
- Roughly 65–70% profitability
- Family run, with sons and sons-in-law involved
- Part-time staffing structure and low overhead
While profitable, the agency had a limited digital infrastructure, used software tailored specifically to crop insurance and faced difficulty expanding its P&C offerings due to limited carrier access and market fit.
Why They Explored Partnership
The founding partners weren’t ready to retire but they also weren’t interested in managing a growing staff or constantly evolving regulatory and tech requirements. They wanted to:
- Offload administrative and operational burdens
- Grow their P&C line through carrier access and infrastructure
- Preserve the legacy for their children, who were actively involved in the business
- Take chips off the table financially while maintaining control
As one partner shared, "I’m 63, and my partner’s 64. We’ll be in the game for a while yet but now’s the time to think about what happens next."
How Equity Expansion Helped
Equity Expansion framed the opportunity in three pillars: operational relief, cultural alignment, and financial structuring.
- Operational Support
Equity Expansion outlined the infrastructure a partner could provide:
- Back-office support (HR, payroll, IT, accounting)
- Access to national P&C carrier relationships
- Sales and service support
- Help scaling their son’s P&C efforts without giving up control
"You keep doing what you do best, writing crops and hail. Offload the rest so you can focus on growth without the grind."
- Cultural Fit
The agency owners were clear: they wanted to partner with someone who understood the crop insurance world especially in the high-hail-risk areas west of Grand Island.
Equity Expansion emphasized that the partnership would not be about control, but collaboration. The goal: maintain autonomy while gaining scale.
"If it isn’t broken, don’t fix it. We’re not here to manage you, we're here to help you grow."
- Financial Structure
Using the agency’s strong EBITDA margins (65–70%), Equity Expansion discussed a structure based on:
- 8–9.5x multiple of EBITDA (potential $8M–$10M purchase price)
- 80% upfront cash (e.g., $8M purchase = $6.4M cash at close)
- 20% equity rollover (e.g., $1.6M rolls into the partner’s equity stack)
- 3-year earnout bonuses based on agency growth
The equity piece was especially compelling. Conservatively, that $1.6M in equity could become $4.8M in 3–5 years, and $14M+ within a decade without needing the agency itself to grow but simply riding the momentum of the larger partner group.
"The purchase price gets you rich. The equity can make your kids generationally wealthy."
Cultural Fit and Long-Term Partnership Value
Autonomy was critical. The founders made it clear: they still wanted to run the show. Equity Expansion aligned with that vision. The partner group they were matched with had a strong foothold in Nebraska and experience with niche markets.
Naming transitions would be gradual and strategic. "We’ve built real brand equity in our name. We want to keep that for as long as we can," one partner noted. Equity Expansion agreed.
Outcome & Benefits
While the final decision was still in motion at the time of the call, the benefits were clear:
- Immediate liquidity with multi-million-dollar payout
- Equity rollover for long-term upside
- Support to grow new lines of business (particularly P&C)
- Preserved legacy for the next generation
- Freedom to focus on client relationships, not back-office tasks
For this Nebraska-based agency, partnership wasn’t about retirement. It was about scale, succession, and sustainability. If you're an insurance agency owner with a high-performing book and a desire to scale or simplify operations, Equity Expansion is here to help.
Schedule a confidential consultation today.