My husband has to sell his insurance book of biz....?

I had an independent P&C agency that I built from scratch. I had to sell it in 2006 do to health problems.

One agent offered me 150% of the annual renewals, but wanted to pay me as the renewals were paid. His brother offered me 175%. I sold it to him for cash. (certified check)

My advice is not to sell it for the renewals as they are paid, because the business will dwindle away,and you will not receive the total amount, because the purchaser will not grow that book.

The going rate for an agency purchase in my area is 150%-175%. If your husband's book is $200,000, his renewals are between $20K and $30K. Just figure the true amount and multiply that by 1.5, or 1.75.

As TOM Z said, that a one-year old book of business might be harder to get the going rate, because of the volatility of the business. (loss ratio, persistency, a lot of non-standard, etc.

Go to www.agencies4sale.com.

Have your husband to call all the independent agencies in his area, especially the ones already licensed through his companies, and try to negotiate a deal. Keep in mind that he would have to sign a non-compete clause in the sales contract with the purchaser.

He may be able to find other carriers and roll the business to them and keep his agency. That would be the best way to go.

Best wishes.

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.

I heard primerica offers 5 times multiples for selling book of business

I suggest that you visit this site where you can compare rates from different companies: http://protectionquotes.net/index.html?src=5YAWds1...

RE :My husband has to sell his insurance book of biz....?

My husband has been doing insurance for only a year, he has 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 (yes we do own it so we can sell it) and i think thats great for your first year if insurance. but 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.

Follow

So if monthly commiss gross is $6k per month x 12= 72k x 2=$144k is selling price?

Hi,

Honestly, it depends. I was looking into my insurance a couple of months ago. This site contains a great deal of helpful information:

http://tiny.cc/O2Zkb

Call me...323-589-5364. Ask for scott