Should I Purchase This Small Book?

[BTFuzz]

I have a current p&c agency I started from scratch approx 10 years ago that is consistently profitable. I am 75% PL and just recently was given the opportunity to make an offer on a small book...about 1/4 mill. The two issues with this book is, the book is only 18 months old and it is 70% commercial....mostly gen liability & wc....not sure of the specific types yet.

The losses are very low, however there is only 1 1/2 years of a track record to go on...in a perfect world there would be 70% PL as that is what we like best...would any of you other indy agents like me make an offer for something this "green"? I'm told there are other buyers lurking also so it may not even be worth bickering over...thoughts?

 

[Insurance-Guy]

If it was near me I would grab it for the right price of course! Why not insult them offer 20k and see what kind of response you get.

 

[b61mack]

what is the reason they are selling it? is it another erie agent? if you could get it at a reasonable price go for it...

 

[xrac]

If the price is right!

 

[Guest]

18 months, thats a nice size book, why are they selling? and for how much?

Any book you buy, you better contact every single client ASAP and let them know whats going on.

Make them feel comfortable with you, Commercial is usually higher commission, and you dont want to see the chargebacks when they leave.

 

[BTFuzz]

If it was near me I would grab it for the right price of course! Why not insult them offer 20k and see what kind of response you get.

This is exactly my line of thinking at this point...the one thing that scares me a bit is that only a few commercial accounts make up the majority of the book and from what I gather it's not the most preferable type business.

 

[GreenSky]

If being top-heavy with commerical is not in your comfort zone, then why lose sleep over this?

Rick

 

[BTFuzz]

If being top-heavy with commerical is not in your comfort zone, then why lose sleep over this?

Rick

I'm not losing sleep over it at all. I just want to cross all T's and dot all I's before I go all in or write it off.

 

[Bertolinoins]

$250k in premium or commission? I would not buy it for cash and neither will anybody else either. Offer 1.5 x revenue payable as 75% of the renewal commission over the next two
years. If the business goes out the door... you are not stuck paying for it.

 

[xrac]

$250k in premium or commission? I would not buy it for cash and neither will anybody else either. Offer 1.5 x revenue payable as 75% of the renewal commission over the next two
years. If the business goes out the door... you are not stuck paying for it.

That would be a can't lose proposition.