What Do You Think this Agency "Hypothetical" Could Sell For?

[shawnmwalker]

Re: What Do You Think this Agency "Hypo" Could Sell For?

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?

 

[insurance1822]

Re: What Do You Think this Agency "Hypo" Could Sell For?

Say you have an Agency that has 3 million in premium, 87% retention, ALL personal lines P&C, 2.5 lines per household, 3200 PIF, Agency renewals 500,000.
Current Net Agency Profit around 200,000 Yr.

What would that type of Agency fetch on the market at sell? 1.5 X renewals? 2X?

In Dallas/Ft Worth Market, Large Farmers Captured Agency.

Let me emphasize that it is not for sale, simply curious...

87% retention is terrible. No less then 1.5 no more then 2.5

 

[reedrhoden]

I don't know why anyone would pay anything for a farmers agency. Most of them can't wait to get away.

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