Steps to selling P & C agency in Michigan

[Mavdog1]

Hi Guys, long time lurker, first time poster. I am looking at retiring at the end of this year. I have a $2 million dollar book of business in Michigan I am looking to sell. The book is a stable book heavily weighted to older clients and ag business (smaller community).

Do you guys recommend anyone in terms of a broker or evaluation specialist? I assume I should reach out to local agents, etc. Any thoughts would be great.

Thanks

 

[Thomas Mead]

Hi Guys, long time lurker, first time poster. I am looking at retiring at the end of this year. I have a $2 million dollar book of business in Michigan I am looking to sell. The book is a stable book heavily weighted to older clients and ag business (smaller community).

Do you guys recommend anyone in terms of a broker or evaluation specialist? I assume I should reach out to local agents, etc. Any thoughts would be great.

Thanks

I would actually check with a nearby MassMutual office since they actually have a specialist that does business valuations for planning and buy/sell agreements. Chances are that person will probably know someone who is interested as well as having established guidelines for the determination of value.

 

[Derrick]

Where at in Michigan? What carriers do you have?

 

[Mavdog1]

Hi Derrick, I am actually captive, with all major surplus lines. Stable personal lines, ( home and auto) with many large farm policies (smaller community). Excellent retention

 

[IndieAndy]

I've bought books in the past and they usually sell by a certain multiple of the gross commission. For instance, if the book of business is a well-established base of clients and makes $100,000 annually in gross commissions then the multiple might be a factor of 2-3 times that amount.

If the book is a turn and burn type of clientele it can go as low as a multiple of 1 times earning. This is just anecdotal experience.

How people buy books vary too.

They can give you cash and may want to negotiate the price because of this. Some secure loans from banks to then give the agent a cash deal for a lower multiple of gross.

Another way to structure it is over time.

Some buy P&C books over time through a flat fee with an interest % attributed to the remaining principal. Just like a regular loan.

Others buy books based on retention which is way more complicated. I've tried to do this and the trust between both parties and overall complications made us choose a cash deal.

Lots of way to do this.

I recommend reaching out to similar agencies in your area and having a conversation.

Lot of agency owners are trying hard to identify those who are retiring.

 

[Mavdog1]

Thank you. Good stuff.

 

[Dreamiekid]

Hi Guys, long time lurker, first time poster. I am looking at retiring at the end of this year. I have a $2 million dollar book of business in Michigan I am looking to sell. The book is a stable book heavily weighted to older clients and ag business (smaller community).

Do you guys recommend anyone in terms of a broker or evaluation specialist? I assume I should reach out to local agents, etc. Any thoughts would be great.

Thanks

There is a group in facebook that sell/buy book of business. You should check them out.

 

[Mavdog1]

Thanks Dreamiekid, I will head over there. I appreciate that.

 

[Dreamiekid]

Thanks Dreamiekid, I will head over there. I appreciate that.

**Insurance Books for sale** exact name. Lots of useful information.

 

[Brokerlikeaboss]

If you are captive, I'd suggest sending a mass email to other captive agents in your state. I know there's about 30 Allstate agencies for sale in my state... but Indy agencies are harder to come by. I've been looking for one in or around OH for awhile now.