Employer Benefits Agency Buying/Evaluation

[Pal]

I am an LH licensed independent agent who owns an agency writing only Employer benefits and I am going to meet with another Employer Benefits agency owner on Friday about buying his book of business.

What questions should I ask and how to analyze the price value?

Thank you for your help!

 

[somarco]

Why are you attempting to determine a value when there are companies who specialize in this service?

Search "business valuation services"

 

[Pal]

Yes, before moving to that step. I would like to understand the details from my end

 

[somarco]

Yes, before moving to that step. I would like to understand the details from my end

Talk with a business valuation specialist and ask them to explain what they do.

Having once worked for such a firm I can tell you the process is complicated and there are several right and wrong ways to go about it.

 

[leevena]

I am writing this off the top of my head so I am sure it will not be all inclusive, but aside from what Somarco said, I would want to know more about how the book was acquired, who is/are the key relationship contact(s) in the Agency. As you are probably aware, most of the business was probably sold because of the relationship between the client and the agency. Will you be losing those relationships, and when. Good luck.

 

[somarco]

most of the business was probably sold because of the relationship between the client and the agency.

Key point! Especially with employee benefit plans.

Also, will carriers honor AOR? Is business insured, self-funded, what?

Personally, I would not entertain buying a benefits block. Too many bad things can happen in Nov & Dec to make the block shrink by 50% or more. Been there, done that. Got the t-shirt