Questions to Ask when Buying a Block of Business
- Thread starter Denniston
- Start date
- Thread starter
- #3
I'm looking to buy, not sell.
lol that was the question to ask...
here's a few off the top of my head:
average age?
what carriers are the clients in?
percentage of book each carrier makes up?
Will the seller help introduce you to the clients (ie: a mailer to the clients saying the book is being sold, and that you are a trusted source to take care of them?) Will the seller be available for a period of time after the sale to assist you with any service related questions or anything else?
Average length of time each client has been on current plans?
P/E ratio of the book?
- Thread starter
- #5
LOL, I guess I'm a little slow.
- Thread starter
- #7
Thanks, there's some good questions there.
As far as the P/E ratio, is that cost of buying the book divided by the commissions?
P/E = Price to earnings.
usually Medicare books are valued anywhere from 2-3 times annual revenue. A few factors will either make it closer to 3 times earnings, or closer to 2 times earnings. looks at things like start ratings, average age of clients length of clients been on the book etc... you may want to get a professional valuation before you buy it.
- 1,199
- Thread starter
- #10
The way it sounds the seller understand they will only get paid on business that sticks.
