Looking for Advice on Buying an Agency

[lookingtobuy]

I am looking to buy a pretty big book of business and may have found something to buy in Florida (Allstate) - there just weren't very many big independant books available right now. Can anyone give me any advice on key issues to put in the purchase agreement that I may not be aware / thinking of? I do plan on using an attorney for the Purchase Agreement but I want to make sure I am not forgetting key issues as I move forward. Any comments would be REALLY helpful! Thanks!

 

[OHInsAGNT]

I am looking to buy a pretty big book of business and may have found something to buy in Florida (Allstate) - there just weren't very many big independant books available right now. Can anyone give me any advice on key issues to put in the purchase agreement that I may not be aware / thinking of? I do plan on using an attorney for the Purchase Agreement but I want to make sure I am not forgetting key issues as I move forward. Any comments would be REALLY helpful! Thanks!

Did the owner retire, quit the business, go independent or get fired? The last two will likely cause you a lot of problems.

 

[1manshow]

My first question would be "why are so many Allstate agents selling ?" When I was looking several years ago it was the same thing, four or five Allstate agencies for every IA on the market. And valuations on those books were considerably lower than IA's with similar numbers.

 

[lookingtobuy]

Did the owner retire, quit the business, go independent or get fired? The last two will likely cause you a lot of problems.

The original owner is retiring (he is in his late 60's).

 

[robyn]

Look at the CSRP report. See what the retention is, especially 5 year retention. See what kind of growth they have had recently. When we purchased an older retiring agent there was just no growth going on but good retention of current clients.
How stable is the Allstate market in Florida right now? I know they had problems for a while last year.
Find out how competitive the rates are in the area. Ask someone other than the market distribution leader and the agent trying to sell!