Dec. 04--The state program assisting victims of the 2016 floods is offering buyouts to people living in especially hazardous areas.

Officials with Restore Louisiana announced Monday that homeowners residing in floodways can receive up to $200,000 in buyout money, if they are willing to move out of their disaster-prone homes.

Floodways are areas where water would be expected to flow -- not just fill -- during a 100-year flood, said Pat Forbes, director of the state Office of Community Development. Floodways are specially designated on the Federal Emergency Management Agency's flood insurance rate maps.

Forbes said in an interview that providing buyouts to people in floodways helps move people out of risky areas and improves water flow during a flood.

"Not only do we get that family into a safer home, but by removing that structure from the floodplain, we have also removed potential debris in the flood," Forbes said.

People living in these areas have until now been ineligible for help from the $1.3 billion Restore Louisiana homeowner assistance program, because federal dollars cannot be used to rehabilitate homes located within floodways, Forbes said.

Only those people who have already applied to the Restore Louisiana program are eligible to be considered for this funding.

Officials have identified and are contacting about 450 homeowners who meet the requirements, but it is not clear how many people might take part.

"There will certainly be some folks who don't want to leave their homes," Forbes said.

The program is projected to cost $45 million.

The Restore Louisiana program will pay for homes in the floodway that sustained major or severe damage during the March or August 2016 floods and are in any of the 51 disaster-declared parishes. Since floodway homes can have depressed values, the program is also offering extra funds to help homeowners purchase new homes in less-risky areas.

"Some of these properties may not be worth very much, because they are in a floodway, and flood insurance is so expensive," Forbes said. "We can look at the average cost of buying a house (in the area) they live in and provide that much."

Homes purchased through the program will be demolished and turned into green space.

Unlike FEMA's hazard mitigation grant program, which also provides buyouts, there will be no match required from the homeowner.

Part of this new phase of the Restore Louisiana program will involve helping people who live in the especially flood-prone subdivisions of Pecan Acres in Pointe Coupee Parish and Silverleaf in Ascension Parish.

Restore Louisiana is funded through the U.S. Department of Housing and Urban Development.

As of Nov. 23, the program had offered $523 million to 15,158 homeowners across Louisiana, according to a recent Restore Louisiana disbursement report.

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2026 is expected to be a strong year for insurance company merger and acquisition activity. Taking steps to prepare an agency or brokerage before putting it on the market can increase its valuation and attract more – and better – buyers.

Buyers want to acquire an agency or brokerage that’s already performing well so they can plug in their resources, tools and infrastructure to turbocharge that growth. They want to buy a well-oiled machine, not a fixer-upper.

Here are five steps agency owners can take to make their business the top performer acquirers want.

1. Maximize organic growth

Brian McNeely, chief financial officer and partner of insurance advisory firm Reagan Consulting, said that when he contacts a prospective buyer about an agency they may want to acquire, their first question is always, “What's their organic growth?” McNeely noted that while organic growth and profitability are the top two drivers of value, sustained organic growth is what buyers prize most.

And sellers must be prepared to show what’s behind their organic growth. How long has it been going on? What’s the trajectory for the future? And how is that growth distributed among clients, producers and carriers? The Agent Support Network of America (ASNOA) recommends selecting 8 to 12 core key performance indicators, setting benchmarks for them, and establishing automated reporting through an agency management system. With those systems in place, potential buyers will be able to immediately see the company’s strengths and growth outlook.

2. Increase diversification

Too much reliance on a few clients or on one carrier can put a firm at significant risk of revenue loss should any of those pillars go away. Buyers are especially wary of acquiring firms with large concentration risks. Healthy cash flow today could slow to a trickle if a firm’s major client chooses to go elsewhere after the sale or if its primary carrier stops offering the firm’s main product.

To reduce concentration risk, bring in new clients by increasing advertising or offering producer bonuses for successful prospecting. Diversify product offerings, both with existing carriers and with new ones, to reduce dependence on any one revenue source.

3. Develop areas of specialty

Within an environment of diversified revenue streams, developing specialty areas can make an insurance company especially attractive to buyers. Advisory firm MarshBerry points out the value of building one or more areas of specialization – e.g., healthcare, technology, construction, hospitality, real estate or manufacturing - in an insurance firm.

Specialty areas can focus on a particular industry, product, demographic or geographic area. The key is to develop niche expertise without becoming overly dependent on one vertical.

4. Broaden management and production

Agency management that is controlled too heavily by the owner will be a red flag to potential buyers. What will happen after the sale and the owner leaves? Will the company culture collapse? Who will provide leadership? To avoid this issue, broaden the agency’s management team and intentionally develop leaders who can provide continuity after the sale.

Buyers also want to see a strong team of producers, not just one star at the top of the leader board. It’s good business to intentionally develop all the firm’s producers and create an atmosphere in which everyone wants to deliver their best. Remember that for buyers, talent = assets. Protect those assets by investing in their professional development and certifications. And don’t be afraid to pay for top talent.

5. Prioritize transparent reporting

Potential buyers expect a clear picture of what they’re acquiring, and that means they need access to complete and transparent financial records. A company doesn’t need to be perfect to be a good candidate for acquisition – every company has some warts. What the buyer needs is a firm understanding of the company’s financials so they can put a “why” to any blips that show up in the records.

It’s not unusual for a young agency or brokerage to do all its bookkeeping in-house. As the business matures, however, it’s wise to bring in an outside accountant to provide impartial, audited financials. Many firms also employ either a full-time or fractional chief financial officer to establish and maintain disciplined financial record-keeping. Having a history of strong financial reporting will make it easier to provide the transparent data buyers expect.

Preparing for success

McNeely recommends that owners – even those who aren’t planning to sell immediately - operate as though their business will be sold tomorrow. That means recruiting top talent and focusing on core business interests to build strong organic growth.

It also helps to develop niche specializations while maintaining diverse revenue streams and to support the business with transparent record-keeping. These preparations will pay off when it comes time to market and sell the agency.

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