4x for a Profitable Personal Lines Book?

[insurance1822]

What's the most you think (or have seen) independent books of business sell for? Assuming great loss ratios, retention & top direct appointments like Safeco, Travelers, Kemper, Donegal, Encompass etc. One of our reps claimed a guy was offered 4x and still wouldn't sell.

Theoretically (at 4x) it may make sense to sell your book once it hit's around $1,000,000 and start over..

 

[djs]

I've never heard of a book actually selling at 4X. To even approach 3X, it has to be a great book and mostly commercial.

It also depends on how you measure this though. Some deals include other things, such as office space, equipment, computers, guarantees, etc. This can appear to up the multiple but they aren't buying the book alone at that point.

Dan

 

[insurance1822]

Why would it need to be mostly commercial to command that higher value? I would think personal is more stable & less prone to turnover like larger commercial accounts who are getting hounded by other agents on the regular.

That being said...we're 98% personal lines so we don't know much about the dynamics of the commercial world.

 

[1manshow]

I've seen several go for 4X...being an Erie agent that's not uncommon. With the highest persistency in the biz...couple that with a fast growing, historically profitable book and you'll get high numbers. And...there's a line waiting to buy.

At 51yrs old and 26yrs with Erie...I find myself closer to stepping across that line every day. And looking forward to it.

 

[blue_wynd]

I've seen several go for 4X...being an Erie agent that's not uncommon. With the highest persistency in the biz...couple that with a fast growing, historically profitable book and you'll get high numbers. And...there's a line waiting to buy.

At 51yrs old and 26yrs with Erie...I find myself closer to stepping across that line every day. And looking forward to it.

51? You got at least 20 more years. 50 is the new 30.

 

[1manshow]

Not for this guy....4 x 1Mil will get me close to margaritaville

 

[AdvisorsIns]

I am new to the independent world. I started my agency scratch March of 2012 and just hit 1.1 million book of business in premium written. How do I value you this? When you say 4x What does that mean?

 

[Bertolinoins]

I have not witnessed that. Most acquiring agencies are offering a multiple of the EBITA so I guess hypothetically a very profitable agency with expenses well below industry average could command that type of multiple.

I did see 3X for a very profitable PL agency where the acquiring agency hit some very large profit sharing numbers due to the acquisition.

 

[blue_wynd]

I am new to the independent world. I started my agency scratch March of 2012 and just hit 1.1 million book of business in premium written. How do I value you this? When you say 4x What does that mean?

I believe the 4x is what your agency is getting in commissions before all the expenses. You know, salary, taxes, rent, the wife.

Disclaimer: Wife is optional.

 

[agent m]

I believe the 4x is what your agency is getting in commissions before all the expenses. You know, salary, taxes, rent, the wife.

Disclaimer: Wife is optional.

Additional disclaimer: Don't mention that last part to the wife...tried something new, did not fly so great. I can be reached for further comment at a new place which, I am assured, leaves the lights on for me.