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Reply to Looking  for Agents Who've Personally Bought MAPD Books     
Old 09-12-2017, 09:30 AM   #1
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Looking  for Agents Who've Personally Bought MAPD Books Looking for Agents Who've Personally Bought MAPD Books
I'm in the middle of negotiating the purchase of a book of MAPD business. The seller and I are having trouble coming together on a valuation. I've heard everything from 1x to 3x. So I'd like to hear from those who actually have experience. I like the business, but I don't want to over pay.

Thanks

Jason
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Old 09-12-2017, 09:52 AM   #2
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Todd King on Looking  for Agents Who've Personally Bought MAPD Books
 
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Looking  for Agents Who've Personally Bought MAPD Books Re: Looking for Agents Who've Personally Bought MAPD Books
The usual industry standards that I've seen are 2.5X. I've heard 2X and as much as 3X, but never above that. I think the lowest I've ever heard was 1.5X.

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Old 09-13-2017, 08:30 AM   #3
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axeman462 on Looking  for Agents Who've Personally Bought MAPD Books
 
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The value will be dependent on Star Ratings (For stability reasons), average age of the customer (so you know how soon the will probably die), average of how long they been on the book (for loyalty reasons), and how diverse the book is over X many of companies (also for stability reasons).

It might be best to get the book appraised by a 3rd party. If you cannot, dig through the book the best you can, and find out these data points. Use that as a starting off point to negotiate.

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Old 09-13-2017, 09:23 AM   #4
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Looking  for Agents Who've Personally Bought MAPD Books Re: Looking for Agents Who've Personally Bought MAPD Books
Originally Posted by axeman462 View Post
The value will be dependent on Star Ratings (For stability reasons), average age of the customer (so you know how soon the will probably die), average of how long they been on the book (for loyalty reasons), and how diverse the book is over X many of companies (also for stability reasons).

It might be best to get the book appraised by a 3rd party. If you cannot, dig through the book the best you can, and find out these data points. Use that as a starting off point to negotiate.
Good lord--if you have 1000 clients--how do you get that done?

Would the carriers be able to tell you?
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Old 09-13-2017, 10:00 AM   #5
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Looking  for Agents Who've Personally Bought MAPD Books Re: Looking for Agents Who've Personally Bought MAPD Books
Originally Posted by Labesky View Post
Good lord--if you have 1000 clients--how do you get that done?

Would the carriers be able to tell you?
Would the carriers be able to tell me what?

This information to look for should be relatively easy to get. The hardest part might be to get the average age of the customer, but even a basic algorithm in excel should be able to find that

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Old 09-13-2017, 10:42 AM   #6
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Looking  for Agents Who've Personally Bought MAPD Books Re: Looking for Agents Who've Personally Bought MAPD Books
Originally Posted by Labesky View Post
Good lord--if you have 1000 clients--how do you get that done?

Would the carriers be able to tell you?
This is another reason to have a CRM. With a couple of clicks I can pull up a client list for each carrier product. I can also look at issue date for said product for each client. I can also see how long that client has been with me (assuming product changes over the years).
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Old 09-13-2017, 06:21 PM   #7
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Looking  for Agents Who've Personally Bought MAPD Books Re: Looking for Agents Who've Personally Bought MAPD Books
I bought a book from an agent in 2016 who was retiring and wasn't recertifying. We met through a mutual friend (who was also an agent). He told me he wanted 6 months of renewals for them, which I paid. Was a win/win for both of us since he was going to lose them anyway after Jan 1st. The majority of the clients were on a local zero premium plan so I figured they weren't going to move anytime soon.

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Old 09-13-2017, 06:34 PM   #8
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Originally Posted by jacobtn View Post
I bought a book from an agent in 2016 who was retiring and wasn't recertifying. We met through a mutual friend (who was also an agent). He told me he wanted 6 months of renewals for them, which I paid. Was a win/win for both of us since he was going to lose them anyway after Jan 1st. The majority of the clients were on a local zero premium plan so I figured they weren't going to move anytime soon.
How cool is that! I would do that deal in a heartbeat.
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