Selling Insurance Agency

[Mandynh7]

I've decided insurance isn't really my thing and am pursuing an alternate career. I'm pretty new in the business, and only have $125,000 total premium. I want to sell my book, but not sure how to determine the worth or how I should market it. Any suggestions? I am an independent agent...
Also I have asked my insurance mentor, and his suggestion was between $15,000-$25,000, including my furniture/equipment, worth over $5,000 at replacement value.
Thanks in advance for your comments.

 

[STIBROKER]

so....going to sell cars.....

 

[Insurance-Guy]

Where are you at? What company/companies is the business with?

 

[Bertolinoins]

Hard to value a fairly new small agency. If you were talking to me... I would offer 40% of renewal commission for 3 years with no down payment. I would never pay cash for a book that isn't seasoned and is fairly small. The risk of it disappearing is high.

 

[BTFuzz]

Hard to value a fairly new small agency. If you were talking to me... I would offer 40% of renewal commission for 3 years with no down payment. I would never pay cash for a book that isn't seasoned and is fairly small. The risk of it disappearing is high.

I concur with this....I'd never stroke a check for full amount with no history.

 

[Guest]

I have always heard buying an IA P&C agency is 1.3 to 1.5 times the yearly commission.

 

[Insurance-Guy]

I have always heard buying an IA P&C agency is 1.3 to 1.5 times the yearly commission.

Maybe for a book like this 1 x. However for a good book with good LR and retention you should get 2x to 2.5x.

 

[Guest]

Maybe for a book like this 1 x. However for a good book with good LR and retention you should get 2x to 2.5x.

I have always thought that number was a little low, but that is pretty far from my mind and not researched it yet. I would hope it is higher, I wouldnt sell mine for less than 2 to 2.5 for sure.

 

[Bertolinoins]

I have always heard buying an IA P&C agency is 1.3 to 1.5 times the yearly commission.

There is really no standard. I have seen them go for .80 of annual revenue up to 3.5X annual revenue. The issue is the tiny book and the relative short time she has been in business. Could be a "friends and family" book that are not friends and family with the new owner so retention could be terrible.

 

[Insurance1guru]

I have always heard buying an IA P&C agency is 1.3 to 1.5 times the yearly commission.

I think 1.5 multiple is about right for IA. I sold my Allstate agency for 2.3.