Does Anyone Have Know How to Value an Annuity Agency?

[gh2009]

I have someone interested in purchasing my agency but I have no idea as to what its value is. Is there some percentage that I could use? The agency is about 99% annuities. Please help!

 

[padthaiforlunch]

Are there any renewals? If so, do they go to the agency, or will they pass to the current owner?

Also, age of clients. Are they working and putting $ into retirement accounts or are they old and fairly set?

How many clients are out of surrender? How much $$ will be out of surrender in the next year or two and available for rollover?

How much $$ is tied is tied up in annuities with income accounts? Of that, how many clients are taking the income stream?

Are you cross-selling med-supps to clients?

 

[0b1kanobee]

An easy place to start might be 2 years worth of residuals.

 

[BNTRS]

You know that guy who does your taxes? He could help. He'd at least know someone who could help.

 

[padthaiforlunch]

If only it was that simple. Most won't have a clue. It's going to boil down to residuals, rollovers and cross-selling (to an extent). Once he has a handle on residuals and rollover then he can start negotiating for x times annual and how involved he will be for x months/years.

 

[scagnt83]

If only it was that simple. Most won't have a clue. It's going to boil down to residuals, rollovers and cross-selling (to an extent). Once he has a handle on residuals and rollover then he can start negotiating for x times annual and how involved he will be for x months/years.

Exactly.
Residuals are the biggie, especially for VA business. Hopefully you have been taking opt 2 or 3. Then it comes down to potential rollovers and such.
But the first thing a knowledgeable buyer will look at is what kind of yearly cash flow are they going to immediately receive. Thats your starting point.


A wholesaler told me the other day about an agent in the lower part of my state who recently sold her book. She had a huge book of business, mainly VAs.
Because she had chose opt 1 for all of them she had almost no real residual income to speak of considering she had over 1000 VA clients.
She could have received a couple mill for her whole book if she had chose opt 2 or 3. Instead she only got $400k!

It pays to think about the future if you plan to be successful!

 

[padthaiforlunch]

A good lesson to learn.

She could have received a couple mill for her whole book if she had chose opt 2 or 3. Instead she only got $400k!

It pays to think about the future if you plan to be successful!