New to the Business... Considering Purchasing Books

[IvoeWesley]

Hello everyone,

I am very new to the business, but I really like the idea of purchasing books from Allstate. I realize that it all sounds good, especially considering my lack of experience and knowledge. I read a few forums about it, but I need to know what to look for. I am far from rich and if this goes wrong, it will be life altering.

Please walk me through this process. I would be ok with paying a fee if you got your hands dirty. Fo example, you actually look over the papework with me and give honest advise, as if it was your money.

If you need more facts, please let me know.

 

[Josh]

There are a lot of facts missing.

Buying a book from Allstate can be a great deal. This forum is mostly indy folks so they're going to dog on it, but the Allstate deal can be a great gig. They're going to make you jump through a bunch of hoops that will help you be successful. You are going to need a robust marketing plan to hit your numbers and if Allstate raises their rates, they still expect production.

A lot of agents do pay more for an Allstate book than they should because they don't know any better. A great deal of it will come down to location, but the metrics on the book (loss ratio, retention, growth, etc) are going to drive your bonuses, so those are important too. I know a guy that bought a book at a very reasonable price because the loss ratio was pretty ugly.

How far along in the process are you? Have you seen their entire pitch and requirements? Do you have the liquid assets and such to be able to undertake the project?

 

[iiinycboi]

why do you want to get into p&c?

 

[xrac]

Have you ever wondered why so many Allstate agencies are for sale?

 

[IvoeWesley]

Josh,
I'm at the beginning of the process. I am schedule to meet with someone today. I don't have the liquid assist, but looking into taking out a small business loan to cover it. However, I am not sure how that will work. This is one of my major concerns... Any suggestions?

iiinycboi,
There is no particular reason for me wanting to get into this side of the industry. I am currently selling L&H. It makes sense to me.

xrac,
No, I have not asked myself that question. Honestly, I would not know if what they have for sell is a lot or not. I do plan to ask the seller the reason/logic behind his decision. As an optimist, I would hope it is because they are retiring or pursuing other options, like me. As an realist, I think your question will prompt me to research further. Do you have an explanation to your rhetorical question?

 

[iiinycboi]

Hi Ivoe, i only ask because p&c is different from l&h and the learning curve may be higher. Although, i think its super easy to sell, with a great niche product.

I wanted to buy a book when i first started, my father was a L&H agent for 20 yrs, and he has a lot of friends in the industry, everyone thought i was going into L&H. I was lucky enough to have mentors and other friendly competition in the field.

I am glad i didn't buy a book, because i wouldn't have been able to learn what i needed to learn.

My suggestion would be hold off, and get your license and work independently with another agency and send them referrals before you start up on your own.

 

[IvoeWesley]

iiinycboi,

That sounds like a logical plan...

What should I learn prior to buying books? Or is having experience the biggest concern you think I should have?

 

[xrac]

......
xrac,
No, I have not asked myself that question. Honestly, I would not know if what they have for sell is a lot or not. I do plan to ask the seller the reason/logic behind his decision. As an optimist, I would hope it is because they are retiring or pursuing other options, like me. As an realist, I think your question will prompt me to research further. Do you have an explanation to your rhetorical question?

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Here is something I have learned about buying a business. The ones that you really want to buy are never advertised on the market. You find them by word of mouth, by being in the right place at the right time, or by knocking on doors asking if things are for sale.