My husband has to sell insurance book of buisness......?

Question

My husband has been doing insurance for a year, he had his own branch but the company terminated his contract and said he was not producing enough right when our first year renewals were going to start. We have a  200,000 premium property and casualty book from his first year. we now need too sell before they take it from him in 90 days. Anyone have any ideas how much we could sell it for or how we find out what would be a fair price? We had one offer for 25,000 bucks but i don't know how she came up with that number, and shes jumping on it really fast so i want to make sure we are getting a fair price for it.

Ed Atun · Accepted Answer

These always sell at a huge discount because the sellers are : retiring, getting laid-off,  in the hospital.  Most buyers want to make payments to you. They would pay $15,000 max but you would get no cash today. For a cash-today sale the price would be $8,000.  Your husband was not in the business long enuf to cement his relationships with customers. My guess is that the first offer was not a true offer..

? · Answer

There are a lot of factors that need to be considered to value a given book of business. First, the premium is not as important as the commissions earned. The price you will receive will be based on a multiple of the anticipated commissions. That multiple can range from 1 to 2 times commission.The multiple is going to reflect what the buyer expects to receive in commissions after the sale. The buyer's valuation will take into account: How much of the business will be retained if your husband is no longer the agent? As your husband has only written the insurance for one year it is a negative. The quality of the book of business. Is it a book of non standard auto or a book of upscale homeowners insurance?) Does the book of business consist of accounts with multiple policies for each customer or is it a random group of policies? The buying agent will have a better chance of retaining the customers if they have two or more policies. Another measure of quality would be the loss ratio of the book. Has it been profitable? Is the book concentrated with one company? Or is the business spread out over several companies? Does the buying agent represent the same companies so that the business can be "rolled" into that agent's existing book of business or will the buying agent have to remarket each account. Obviously you are going to get the best price when all of the above factors are beneficial to the buyer.

Anonymous · Answer

if they jumped on it fast for 25k, that's probably a low price, but if you don;t get any better offers before 90 days, you should take whatever you can get at that time

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My husband has to sell insurance book of buisness......?

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