Hey Guys,
Some guy is trying to sell me his very small block of individual & small group health insurance business. One flat payment, or maybe put a clause that if one of the 3 small group clients leave me he gets less or something because they make up 70% of the profit I realized. Health reform is very scary, but in my favor, CA recently agreed to let agents sell in the exchange and pay them competetively compared to out of exchange commissions. THat's good, I guess?
The book makes like $684/mo. I was thinking of offering $4500-$5000. Any thoughts on this? Am I over paying? Or is this a good deal that might pan out? The part that worries me most is that 3 small groups make up 70% of the income. Maybe $4000 flat and I take the risk is fair? Thanks for your feedback!
PS. In an email I wrote him, I cited the following as reasons why I don't think his book is worth much...
1.) I looked at Excel sheet, and 70% of your commission comes from three small group clients. That is very risky--- if one or more leaves, my whole investment is over. Small groups are worth much less than individuals because they can, and often do, switch brokers. 2 of them are from 2012 which means you haven't built much loyalty with them (let alone me).
2.) Locked into the new, lower commission brackets. In the past, 20/10 was standard. Now it's like 12/6 for most carriers or less.
3.) None of your business is grandfathered which raises likelihood that they won't get to keep their plan 2014
4.) A reasonable amount of your individual busienss is first year commission so residuals will get lower.
5.) I consider every month towards 2014 the book gets less and less valuable. If I purchased this in June, I would have had July and August and September commissions by now--- instead, you've gotten those commissions so to me the book is worth less every month I don't buy it.
6.) Health Reform!
Some guy is trying to sell me his very small block of individual & small group health insurance business. One flat payment, or maybe put a clause that if one of the 3 small group clients leave me he gets less or something because they make up 70% of the profit I realized. Health reform is very scary, but in my favor, CA recently agreed to let agents sell in the exchange and pay them competetively compared to out of exchange commissions. THat's good, I guess?
The book makes like $684/mo. I was thinking of offering $4500-$5000. Any thoughts on this? Am I over paying? Or is this a good deal that might pan out? The part that worries me most is that 3 small groups make up 70% of the income. Maybe $4000 flat and I take the risk is fair? Thanks for your feedback!
PS. In an email I wrote him, I cited the following as reasons why I don't think his book is worth much...
1.) I looked at Excel sheet, and 70% of your commission comes from three small group clients. That is very risky--- if one or more leaves, my whole investment is over. Small groups are worth much less than individuals because they can, and often do, switch brokers. 2 of them are from 2012 which means you haven't built much loyalty with them (let alone me).
2.) Locked into the new, lower commission brackets. In the past, 20/10 was standard. Now it's like 12/6 for most carriers or less.
3.) None of your business is grandfathered which raises likelihood that they won't get to keep their plan 2014
4.) A reasonable amount of your individual busienss is first year commission so residuals will get lower.
5.) I consider every month towards 2014 the book gets less and less valuable. If I purchased this in June, I would have had July and August and September commissions by now--- instead, you've gotten those commissions so to me the book is worth less every month I don't buy it.
6.) Health Reform!
Last edited:
