Buying a Book of Business

[The HIC Group]

I am currently in the due diligence process of purchasing a very small book of business.

40 small businesses - group health, all with Oxford.
Annual Revenue - 60k
Selling Price - 50k

They all have been with this one agent for over 6 years and I can work out a retention deal with the seller so Retention isn't my concern.

My concern is Oxford/United health tightening their belts when it comes to commissions. I know they already started cutting commissions at the GA level. Does anyone have any insight into whether or not they will start cutting commissions at the broker level?

Also, what are your thoughts on the seller's offer?

Thanks in advance.

 

[sman]

I am currently in the due diligence process of purchasing a very small book of business.

40 small businesses - group health, all with Oxford.
Annual Revenue - 60k
Selling Price - 50k

They all have been with this one agent for over 6 years and I can work out a retention deal with the seller so Retention isn't my concern.

My concern is Oxford/United health tightening their belts when it comes to commissions. I know they already started cutting commissions at the GA level. Does anyone have any insight into whether or not they will start cutting commissions at the broker level?

Also, what are your thoughts on the seller's offer?

Thanks in advance.

Personally, I wouldn't buy a book of group health. We still have way too many unknowns. For example, will these employers continue group health insurance post 2013? Or will they opt to drop group health and let their employees fend for themselves on the exchange or some variation of that?

But that's just me. If you're comfortable with it and have weighed all the costs, then more power to you.

 

[hassy99]

I am currently in the due diligence process of purchasing a very small book of business.

40 small businesses - group health, all with Oxford.
Annual Revenue - 60k
Selling Price - 50k

They all have been with this one agent for over 6 years and I can work out a retention deal with the seller so Retention isn't my concern.

My concern is Oxford/United health tightening their belts when it comes to commissions. I know they already started cutting commissions at the GA level. Does anyone have any insight into whether or not they will start cutting commissions at the broker level?

Also, what are your thoughts on the seller's offer?

Thanks in advance.

I purchased a block of group business. I paid. 80-90%. Of the actual earned income for 12 months. I took over all service immediately. With ride alongside with the previous agent for a smooth transition
This worked well for both seller and buyer without great risk for the buyer
Group business is so volatile, especially with the changes coming in the next 6-12 months. I would be cautious right now

 

[The HIC Group]

I purchased a block of group business. I paid. 80-90%. Of the actual earned income for 12 months. I took over all service immediately. With ride alongside with the previous agent for a smooth transition
This worked well for both seller and buyer without great risk for the buyer
Group business is so volatile, especially with the changes coming in the next 6-12 months. I would be cautious right now

Thank you Hassy

Good feedback.

 

[MattJohnson]

I was also considering buying a book of biz, this has been helpful.

 

[Mattschmidt]

Matt, do you mind sharing with us how this was helpful to you?

 

[Larry Tew]

I was also considering buying a book of biz, this has been helpful.

Matt, that's 18 posts in 30 minutes. What's your game? You realize that lighting up every thread in the forum with non-substantive posts will irritate people right?

 

[Mattschmidt]

Come on Larry....it's clear he's reading every page of every thread... Right?

 

[Larry Tew]

Come on Larry....it's clear he's reading every page of every thread... Right?

Nothing better than to see a dozen threads lit up by the same person with posts like "that was helpful".

Probably just an honest mistake.