Father wants to pass agency to sons

[jcorr]

I'm in unfamiliar territory here. I'm a life agent and really don't know much about P&C. My father in law has a one man insurance agency and has done pretty well for himself over the last 15-20 years. He's very much old school, does everything himself and it's worked for him. He's expressed interest in passing the agency down to his sons. One has his P&C license's but very limited experience (as in next to none) and the other is interested in getting his license . I personally think they would work well together. I really think my BIL's could do very well with the business.

There's a couple of reasons I think my BIL's would do well. First is that my FIL doesn't do annual reviews. People call him up when they need a change of coverage, or he calls them if there is an issue with a premium payment. Second I don't think he asks for referrals. It's more of a case of getting a call "My daughter just her car, you need to call her" type of thing. He doesn't use any sort of client management software. And he doesn't even ask about life insurance.

What I would like to know is what I can do to help my BIL's be successful when they take over my FIL agency? My ideas right now are for them to get some training through an independent agency like Insurance Agents & Brokers (I think that's what they do), start using some client management software, set up annual reviews, send out birthday cards, and possibly work with a life agent (me!!). Those are just some of things I see that I believe could double or even triple their revenue.

What ideas or resources would you suggest?

 

[shawnmwalker]

Interesting. Where? What state?

What markets/ companies does FIL have? Is FIL in good standing with the carriers? carriers can pull out in BILs are Ins Ignorant.

How big is book? That might be a good indicator of whether FIL has decent relationships with carriers.

What fed one family might not feed two. Or two families for that matter.

The purchase might get difficult. FIL will think its worth more than it is. that's always an interesting transition.....

 

[jcorr]

WI, he has about $800K in premium. He's in excellent standing with his carriers. I truly believe that if his sons take it over they could double or triple the revenues within two years. Typical price is one-two years worth of commissions.

 

[jcorr]

Not sure exactly which companies he has. He has a few town mutuals and some other bigger carriers. He works with a lot of hard to place clients. Most of clients are local farmers, small town folks. A few small businesses here and there.

 

[shawnmwalker]

Have kids pay 1.8 times for dad to walk away. He can keep a few key accounts. BIL come in double book over night. WI good area, good market. Go for it. 800k will need to grow fast to feed two families.

 

[jcorr]

He'll work with them on price and terms. I was thinking of suggesting 20% a year for 10 years. That gives FIL a stream of income and my BILs get an income right away without having to come up with much out of pocket. What sort of client management software would you recommend? Any suggestions on training programs for independent agents?

 

[jcorr]

Good suggestion on FIL keeping a few clients. Keeps him a bit busy, keeps him involved.

 

[shawnmwalker]

Ezlynx.

FIL being involved for too long is dangerous. He can stagnate the progression. Let him keep a few close friends and that's it. Have him come in once a week. Other than that he will not support the change at the pace it will need to occur.