Trying to Buy a Book of Business from Horace Mann Agent

[williamsonja]

I am trying to buy a book of business from a Horace Mann agent

Here are the problems I would love to have some help solving

- appraisal on the book - someone who is fair and won't cost a lot of money. The book is only about $75k in commissions and renewals that Horace Mann and Texas fair plan and windstorm.

- does buying from an employee agent compared to an exclusive agent effect the price?

- he has no staff but has over 700 clients. To grow the business I would have to hire staff. Does that effect the price as well?

- he wants two times commissions and renewals and wants all the money or a big lump sum at closing should that effect the price since a lot people just owner finance.

Any help would be appreciated.

 

[VolAgent]

My only question, is it his to sell? I thought they were not only captive, but employees? I don't believe he owns his book and even if he did, would they contract you as an independent agent?

 

[williamsonja]

Yes they are allowing to sell it but he would have to be an EA to sell back to Horace Mann for one time value.

 

[kongsmasher]

I can only possibly help with the staff and valuation questions.
Staff shouldn't make any difference because agencies are valued by 1 year commissions probably due to the variability in how they can be managed. Other businesses are valued at what was left after expenses, so staff comes into play with that valuation.

The terms of payment all depend on what you want and what he wants. Remind him of the tax consequences of a lump sum payment vs being taxed for smaller amounts over time. Would anyone else buy the policies? If not, would he have to settle for 1 yr from the company? Talk with other horace agents and see if he's gettkng out for a reason. I just happened to have a HM dec page come accross my desk yesterday. We were way cheaper, and we are never...never cheaper than anyone. Ok sometimes. But not often at all.

Disclaimer: ive got 2 years experience! Ha!

 

[Sales71]

I am trying to buy a book of business from a Horace Mann agent

Here are the problems I would love to have some help solving

- appraisal on the book - someone who is fair and won't cost a lot of money. The book is only about $75k in commissions and renewals that Horace Mann and Texas fair plan and windstorm.

- does buying from an employee agent compared to an exclusive agent effect the price?

- he has no staff but has over 700 clients. To grow the business I would have to hire staff. Does that effect the price as well?

- he wants two times commissions and renewals and wants all the money or a big lump sum at closing should that effect the price since a lot people just owner finance.

Any help would be appreciated.

A few question you need to ask..how long he is been around, what is his retention, how is this company rates, I think they cater to teachers and last time I talked to a teacher they were broke and do not make much money. So the bottom line is if you only can sell for Horace Man then it might not be a good deal.

 

[AZSHIS]

I was with HM for a while. I hope you didn't buy the book. He has no legal vested interest.

 

[AZSHIS]

I am trying to buy a book of business from a Horace Mann agent

Here are the problems I would love to have some help solving

- appraisal on the book - someone who is fair and won't cost a lot of money. The book is only about $75k in commissions and renewals that Horace Mann and Texas fair plan and windstorm.

- does buying from an employee agent compared to an exclusive agent effect the price?

- he has no staff but has over 700 clients. To grow the business I would have to hire staff. Does that effect the price as well?

- he wants two times commissions and renewals and wants all the money or a big lump sum at closing should that effect the price since a lot people just owner finance.

Any help would be appreciated.

I worked for HM for a while and laughed at those who bought books from agents. The agent has no vested interest in the book--period. Many of those who bought said books were encouraged by the district managers. A DM tried to pressure me into buying a retiring agent's book and I refused. He quit and three months later the book was given to me. Don't buy something that you will never own yourself.

 

[stevo17]

I woudn't buy someone's HM book either.