Does Having a CRM Affect the Value of Your Book of Biz?

Discussion in 'Insurance Agency Acquisition and Valuation Forum' started by bekahsack, Jul 11, 2017.

  1. bekahsack
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    bekahsack New Member

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    As you can see, I'm new to posting on the forum. I've been keeping up with it and have been reading many threads since I've joined, and I'm finally ready to ask for a bit of help.

    When you're ready to sell your book of biz, does having a CRM in place effect the value of it?

    I know a lot of agents still do things manually (paperwork galore), but I do wonder if having things digitally organized adds value.

    Any other factors that go into valuing your book are also very welcome.
     
  2. Matthew King
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    Matthew King Well-Known Member

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    Information is information, but if I were your buyer. I would value an already organized book of biz that is easily exportable with as much information about your clients as possible. That's just me though.
     
  3. djs
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    djs Super Moderator Moderator

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    Actually, having some sort of agency management system in place is an almost requirement for a P&C agency.

    A life / health agency without some sort of crm or management system would seem pretty sloppily ran to me. How do you keep up with things if you don't automate some processes? At least automate the reminder to do something.

    Dan
     
  4. johndf
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    johndf Well-Known Member

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    Speaking from the L & Health side, I feel it is imperative to have a CRM. Not only to provide information about your client and what they have purchased but also to input and store the conversations you or you office has had with your clients. Dates, times, who spoke with who and what about, etc.

    In reference to the second part of your question, other factors that will determine value, is what type of business is it. FE, Med Supp, under 65 health, etc. Each one will have a different persistency ratio. Also, the seasoning of the business. By that I mean is it a block of new business or has the business been on the books for a long time and is not going anywhere. Renewal commission will also be part of the factoring in process. With our Health blocks of business after the first year comp, you have comp for years 2-5, then in years 6+ you have a lower comp. So your payout will also be a factor. Your question is not just one dimensional, there are a number of moving parts.
     
  5. Sconnieagent
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    Sconnieagent New Member

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    I would say it is a bonus, but not a deal breaker. I purchased a P&C agency last fall that didn't have any type of management system and it is A LOT of work to scan and build the files electronically. This particular agency had been around for almost 100 years, so tons and tons of old policies which is pretty cool to see what people were paying back in the day.

    Would I do it again, absolutely!
     
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