UHC Book of Business

[Ina]

Hi From Sunny Florida....
I am an Independent Agent/Broker, I do small Business Group Health/Employee Benefits and Individual & Family Health Insurance. I currently have about 35 small groups, about 240 subs mostly enrolled with UHC and a few with BCBS. I just turned 60 last month and thinking it's time to sell my book of business and do something else. Could someone please tell me the best way to go about this. Thanks!!!

 

[YouGotMyMoney]

uhc indy ? well that is worth about a nickle and a pack of generic tasteless gum....sorry pal

 

[Ina]

Dude, I seriously think you are wrong, Hardly worth nothing I make over 75K a year right now..It's United HealthCare (UHC) mostly Florida business.

uhc indy ? well that is worth about a nickle and a pack of generic tasteless gum....sorry pal

 

[somarco]

A few years ago you could sell a good block of health business for 1.5x to 2.5x gross commissions and 2.5x is a stretch.

With the current environment you would be luck to get 1x paid over 2 years and adjusted for losses.

 

[ABC]

What do you think its worth?

 

[jbage007]

This is a bad idea. You'll regret selling your block. Realize that what you have is an annuity you have created for yourself. If that block stays together for 10 years, it's worth $750,000. Then you'll be 70 and that is the NEW retirement age. I don't like it.

 

[leevena]

A couple of thoughts. First, if you are trying to find someone to buy the book, try asking some of the local producers, or ask the president of your local health underwriters association.

As for the price, this can vary depending on your the characteristics of your book. A prospective purchaser wants to know if the book will have staying power with them. As a rule of thumb, you may want to start with an asking price of 2.0x annual revenue. This could vary depending on the retention history of your clients. You may be asked to stay on a year or so to help renew your clients and reinforce the new broker's position.

good luck.

 

[YouGotMyMoney]

Dude, I seriously think you are wrong, Hardly worth nothing I make over 75K a year right now..It's United HealthCare (UHC) mostly Florida business.

don't take offense friend, I recently sold my decent uhc block before new commissions came out, but I would have to look at about a dozen metrics before I would consider buying any individual block of health biz....

 

[somarco]

What do you think its worth?

As a stand alone block, sight unseen, 1x over 2 years . . . maybe.

I might increase that to 1.5x or even higher if it looks like there are cross-selling opportunities.

The real worth in small group blocks MIGHT be going back with worksite products and even business continuation/interruption planning with the owner. But that approach is not for everyone and can be a bit of a crap shoot.

Lot's of variables to consider.

As we have discussed (or perhaps debated . . .) the future of small group is questionable at best. Since they are (for now at least) excluded from most of the Obamacrap mandates the market could remain somewhat steady.

But the economy is the big kicker, at least over the next 2 - 3 years and I don't see the job market improving significantly for at least 18 more months.

Once we get to 2014 when everyone who earns less than $100k can get free or subsidized health insurance through the exchange I see the small group market tanking along with the individual market.

As a rule of thumb, you may want to start with an asking price of 2.5x annual revenue.

Obviously one of us is wrong.

Neither of us are wet behind the ears, but I would be hard pressed to come up with that kind of scratch for the reasons

 

[bill3173]

Once we get to 2014 when everyone who earns less than $100k can get free or subsidized health insurance through the exchange I see the small group market tanking along with the individual market.

This is the fly in the ointment. If it weren't for the HCR, I would be very interested in a block like this at 1.5x, but the devil of the thing is you could end up with very little in a very short time. The bright side to it is you have agents that have their heads in the Sand and could be good prospects for a book like this one.