A collection of insurance policies representing a cohesive client base constitutes a transferable asset. This asset comprises the established relationships with clients, the history of their premiums, and the potential for future renewals. For example, an independent insurance agent retiring might sell their established client portfolio to another agent or agency.
The transfer of these client portfolios facilitates growth and market share expansion for acquiring entities. It offers an established revenue stream and reduces client acquisition costs. Historically, these transactions have played a crucial role in succession planning, market consolidation, and the entry of new competitors. The enduring value of long-term client relationships makes these portfolio transfers a significant aspect of the insurance industry landscape.