?? Allstate agency opportunity

insureagent · 05-06-2008, 09:03 PM

As a former EA there are two things I know about this; 1.) there are a number of agents nearing retirement and it's a good time to sell if you can get up to and above a 3x multiple for a BOB like some of these guys are asking, and 2.) there are always a number of new agents (2-3 years) who just finally realize they cant cut it and sell try to sell their little books. If you map out your market, cut a deal with a senior agent somewhere and work a plan you could make bank without having to start from scratch.

xrac · 05-06-2008, 09:29 PM

Originally Posted by insureagent

As a former EA there are two things I know about this; 1.) there are a number of agents nearing retirement and it's a good time to sell if you can get up to and above a 3x multiple for a BOB like some of these guys are asking, and 2.) there are always a number of new agents (2-3 years) who just finally realize they cant cut it and sell try to sell their little books. If you map out your market, cut a deal with a senior agent somewhere and work a plan you could make bank without having to start from scratch.

What specifically would you try to negotiate and/or what would you look for? Is about 2x what these are going for?

djs · 05-06-2008, 09:53 PM

Originally Posted by lisar1208

It is my understanding that all up and down the east coast Allstate is not writing Homeowners anymore and the renewals are increasing.

This is true on the West Coast as well.

It's a fact of life on the way insurance works. Insurance companies are required to have huge reserves to pay for catastrophic losses.

As I understand it, Allstate got hit VERY hard with Katrina losses and the Southern California wildfires. While most carriers are re-insured for this type of loss, they were not as re-insured as they should have been.

They did pay the claims, but it depleted the reserves to the point they can no longer take on new homeowner policies in many states, especially where catastrophic losses are a fact of life.

Allstate is doing the right thing for them as a company, but it's the hard thing for the agents. In California, the agents seem to be writing outside of Allstate for homeowners for now, but that is very tough, and it makes it harder to sell auto, when the business model is based on clients that are homeowners.

They will get their reserves built back up, they will open up to new business again. They will lose a LOT of agents in the meantime. Many were ready to retire anyway, so it just pushes it up some.

Dan

Mr. Bill · 05-06-2008, 11:12 PM

Originally Posted by xrac

There does appear to be quite a few Allstate Agencies for sale. Is there any certain reason that is the case?

Agencies4sale.com

Reposting for the link. Check your state, see what's for sale, call the current owners and see what they say. I mentioned Texas, there were a lot for sale. Seems like a pattern.

Steve · 05-07-2008, 06:02 PM

I have an acquaintance who opened up an Allstate Agency in WI about nine months ago and has already shut-down, despite investing heavily in the business and doing a pretty decent job.

Auto, she was typically double (truly double) the other captive co's pricing.

Home, she was 50-75% higher than the others.

Businesses -- they don't do them.

She couldn't see continuing to pump money into it without knowing what the future would bring. The corporate person that came in to help shut down the office said that travelling around and helping people shut down was all she was doing...

Mr. Bill · 05-07-2008, 06:11 PM

That was truly painful to read!!!

xrac · 05-07-2008, 06:28 PM

Originally Posted by Steve

I have an acquaintance who opened up an Allstate Agency in WI about nine months ago and has already shut-down, despite investing heavily in the business and doing a pretty decent job.

Auto, she was typically double (truly double) the other captive co's pricing.

Home, she was 50-75% higher than the others.

Businesses -- they don't do them.

She couldn't see continuing to pump money into it without knowing what the future would bring. The corporate person that came in to help shut down the office said that travelling around and helping people shut down was all she was doing...

Does anyone know how widespread this is? Did she not check to see how competitive rates were before she opened or did they do this to her in midstream?

Mr. Bill · 05-07-2008, 11:46 PM

Another reason to have an earn-out provision instead of pure cash on the purchase!

Insurance Phoenix · 05-08-2008, 11:38 AM

Originally Posted by dtodd

Passed the initial screening and now waiting to be contacted by the "Sales Leader" anyone have in input from here on. Living on the coast of South Carolina I understand no new agents are being placed in coastal counties. All new offices are going inland, suggested to me to overlook any agencies for sale on coast due to restrictions on writing policies and thus being able to grow the book.

So far it seems to easy. Any one have any experience getting started with AllState

Thanks

I was a life insurance specialist for Allstate once upon a time and worked closely with about 10 agencies. Allstate is usually very creative (see their tv ad's) and always trying to gain market share, it seems. Like other carriers, they are placing more and more emphasis on life insurance sales but overall I'd have to say they are good to work for.