Purchasing Existing Book of Business with Allstate

[7107]

No Problem,

P.S.

I Like The Way You Put Caps At The Beginning Of Each Word.

i actually had caps on for the whole message and it did that automatically. I would never take the time to do that
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So I have this straight. Basically everyone is telling me that the best thing at this time given the circumstance I am in is to walk away? I appreciate all of the input, I am glad I came on here before jsut jumping right in. Thanks again!

 

[xrac]

Thanks Everyone, I Think I Am Going To Hold Off. Just Does Not Seem To Be The Right Time To Drop $400,000 Into A Expensive To Obtain Issurance Company. I Will Hold Out And See Where This Economy Takes Us. Several People Have Informed Me That If I Were To Take Over The Book Of Business And For Some Reason Loose More Clients Than Anticipated With A Combination Of A Slow Start, I Could Be In Some Serious Trouble. I Just Do Not Think I Want To Have A 3 Month Watinging Period To Get In Office. Seems Like Alot Could Happen To Not Just The Ecomomy, But The Current Rates Allstate Could Change And The Undetermined Amount Of Clients I Could Loose In The Book While The Sale Is Being Finalized. Thanks Again!!

And Allstate could come in and tell you they are going to terminate you and you could be left holding the bag. This isn't something I would wager $400,000 on.

 

[Josh]

And Allstate could come in and tell you they are going to terminate you and you could be left holding the bag. This isn't something I would wager $400,000 on.

Allstate buys the book back worst case scenario.

 

[infoe]

Allstate buys the book back worst case scenario.

at 1.5x earnings which is $300k of 2mil in revenue...instantly putting him down $100k minus whatever he's invested in the business.

Anyone going in allstate and is hellbent on buying a book needs to have experience with allstate, experience in the industry and should buy the maximum size book of business that will still allow you to receive the new agent commissions.

 

[xrac]

Allstate buys the book back worst case scenario.

All State will give the value of the book when he sells it not the value of the book he paid for. If a buyer can't be found the current TPP is 1.5X book I think and there is talk that this will be reduced. If he pays more than 1.5X or if the TPP is reduced, if the book shrinks due to rising rates, etc. it is possible to buy a book for $400,000 find it only worth $300,000 a year later. In addition you may have another $50,000 of debt from marketing, staffing, and lease costs. This is not a foolproof venture by any stretch of the imagination. Allstate can remove you for any reason.

 

[Josh]

at 1.5x earnings which is $300k of 2mil in revenue...instantly putting him down $100k minus whatever he's invested in the business.

Blah blah blah. They give you time to hit marks, when you don't hit your marks you can drag this out over a year or even more. That's assuming an inability to sell it outright.

That's also assuming he crashes and burns. My guess? A good head on someone's shoulders plus dealer experience plus good CSRs PLUS Allstate's training and support sounds like a great launchpad for success.

BTW- How many people on here have actually work the Allstate program vs just making stuff about what they've heard or guess about the Allstate deal?

 

[infoe]

Blah blah blah. They give you time to hit marks, when you don't hit your marks you can drag this out over a year or even more. That's assuming an inability to sell it outright.

That's also assuming he crashes and burns. My guess? A good head on someone's shoulders plus dealer experience plus good CSRs PLUS Allstate's training and support sounds like a great launchpad for success.

BTW- How many people on here have actually work the Allstate program vs just making stuff about what they've heard or guess about the Allstate deal?

I've been an agent with state farm so while not the same probably more qualified to answer than you.

Now, it's not a bad option but not the best as I previously mentioned there are better ways to get in the biz..even if it is with all state hes better with new agent contract than that purchase that has more potential downside..any ways he seemed to take popular advise I believe wisely...no point in continuing back and forth.

 

[Norwayguy]

If you think you want to try this option sometime down the road...Study for and pass the licensing now.

 

[Josh]

Now, it's not a bad option but not the best as I previously mentioned there are better ways to get in the biz..even if it is with all state hes better with new agent contract than that purchase that has more potential downside..any ways he seemed to take popular advise I believe wisely...no point in continuing back and forth.

Sure there is, plenty of people come along and read this stuff years after it's posted, especially on a hot item like this.

I think the scratch agent contract is great, but there is also something easier about taking an existing agency with existing CSRs and letting the book take care of itself and keep generating revenue while a new agency owner gets busy marketing and helping it grow quickly. I think you wildly overestimate the potential downside on purchasing an Allstate book at 2x renewals.

I've been an agent with state farm so while not the same probably more qualified to answer than you.

That's an interesting tone. I spent nearly a year managing an Allstate office and nearly purchased a $3mm book out west, do you believe that your most likely lengthier experience at SF makes you more qualified to talk about Allstate than my experience actually working as a de facto agency principal? I suppose that's why you used the words "probably more qualified"

Just the same, the Allstate Agency program does help agents get started and there are literally hundreds of Allstate agents if not thousands, that succeeded in the insurance industry because of the training, programs, and support that Allstate provides that most other ways of getting into the business simply do not afford.

 

[infoe]

Sure there is, plenty of people come along and read this stuff years after it's posted, especially on a hot item like this.

I think the scratch agent contract is great, but there is also something easier about taking an existing agency with existing CSRs and letting the book take care of itself and keep generating revenue while a new agency owner gets busy marketing and helping it grow quickly. I think you wildly overestimate the potential downside on purchasing an Allstate book at 2x renewals.



That's an interesting tone. I spent nearly a year managing an Allstate office and nearly purchased a $3mm book out west, do you believe that your most likely lengthier experience at SF makes you more qualified to talk about Allstate than my experience actually working as a de facto agency principal? I suppose that's why you used the words "probably more qualified"

Just the same, the Allstate Agency program does help agents get started and there are literally hundreds of Allstate agents if not thousands, that succeeded in the insurance industry because of the training, programs, and support that Allstate provides that most other ways of getting into the business simply do not afford.

Definately why I said probably...50%/50% chance youd have any experience with working at Allstate.

I have none so I was incorrect you probably are better suited to form a direct opinion. I still feel my opinion is very valid. As I do yours.