Should i buy personal or commercial lines agency?

[NCAgent828]

Looking to buy a book of business. Talking with one individual and they are primarily commercial lines. Some personal lines but few. Any advice when looking at both personal and commercial lines books of business? Which is better and why?

 

[VolAgent]

It really just depends on what kind of agency you want to run, where you feel comfortable and where you see the industry in 5 years, 10, 20, etc.

And that assumes all things are equal, which they aren't.

Unless the commercial agency includes a agency manager or has someone who is able and willing to teach you their niches, that could be a recipe for disaster. To start with, you'll need to make sure you can keep the appointments, and that applies to both personal and commercial.

 

[NCAgent828]

Thanks so much for the information!

The owner is not involved and the woman who has ran the agency for years is wanting to retire. She is willing to stay part time to make a clean transition. During this time I will be pursuing all required education and training on what the book includes so that i can also train the individual I will be hiring to service effectively. Based on this does it sound like a good book to pursue? $600k premium, commissions from 2017 $130k, asking $200k.

 

[VolAgent]

I'd ask @Markthebroker. Not a big multiple to revenue, which is nice. But it could also indicate problems with the book.

You'll need to find out about loss ratios, was stuff written properly, retention, etc. Also will you be able to keep the appointments?

 

[NCAgent828]

I'm working towards appointments with the 3 carriers they have. I can write with Travelers through the group i'm apart of. I've heard that buying a book like this one would encourage them to give me an appointment, is that true? Obviously would need to gain appointments before buying but didn't know if this would guarantee an appointment. I'll certainly reach out to him as well!