4x for a Profitable Personal Lines Book?

So if my agency brings in 150k per year the market would give 3-4x that amount? That seems huge. I'm up for sale if that's the case

I will just start a new scratch agency in another town and do it again every 2 years.
 
Averages in my market for an established agency:

1X for non standard
1.5 for CL/PL mix
2.0+ for preferred personal lines

Some go for much higher but it all depends in the EBITA and client mix.
 
Averages in my market for an established agency: 1X for non standard 1.5 for CL/PL mix 2.0+ for preferred personal lines Some go for much higher but it all depends in the EBITA and client mix.

Thank you for the info. We are 90% preferred PL with most clients set up on EFT and annual mode. Completely paperless. That's great to hear it could be worth more than 2x. Exciting!
 
Thank you for the info. We are 90% preferred PL with most clients set up on EFT and annual mode. Completely paperless. That's great to hear it could be worth more than 2x. Exciting!

Being young, and new to insurance. This makes me so much more excited about what is ahead of me. A constant rewarding career! ;)
 
AdvisorsIns, remember to factor in growth, persistency, profitability

Our 5yr avg LR is 40ish, avg yearly EP growth in double digits, 70% PL, and persistency in the low 90's...all played a factor in the valuation.
 
This has been my Experience


Define Non Standard: Guy walk in gets a policy, well to get an id card, might keep it for a few months. Pays in cash so you have to see him monthly and service him. There is a cost to that. And No residual income.


Non Standard book = .75 the annual commission.




Define Preferred: Middle America. Auto, Home, Credit score. Too busy to shop Ins all the time. Too affluent to care about the $200 difference. File is paper thin because he only calls to replace a car every five years and is on EFT.


Preferred Book= 1.8 to 2.0 the annual commission.




Captive agents are sold on the idea their book is worth more and then they try to sell for 3.0 and it does not move. By the time they do sell it is at 1.8-2.2


How did I do.
 
I wonder if being apart of a very well run cluster which brings better profit sharing , over ride bonuses, higher payouts helps your evaluation or hurts it due to the monthly fees.
 
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