Valuation for Books of Business

Aug 6, 2019

  1. insurlegend
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    insurlegend Expert

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    Hello all,
    I have worked for a captive agency and am on track to open an agency with this company. However, with this company I will not own my book of business so I do not know much about valuations when agents look to retire or just sell their books. I was wondering if anyone here has a general formula that they use for valuing books of business (mainly P&C). I was hoping to use this as a factor in my decision making process because that would be a great asset to have and I want to know how it will factor into agency ownership. Does anyone have advice regarding this? Thanks so much!
     
  2. gambrinus
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    gambrinus Guru

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    #1 - "with this company I will not own my book of business"

    Valuation of any book is like grabbing Jello. Every offer to buy will look at different factors.

    But.. .you said you won't OWN it anyway... what does your contract say? How are you bought out after a certain time? If it isn't in writing... in the contract... it won't happen.
     
  3. insurlegend
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    insurlegend Expert

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    I was asking in regards to looking at other opportunities to see if the value of owning a book would change which route I go depending on companies. And yeah it seems like it is hard to place a value I was just looking for a rough estimate if possible, thank you!
     
  4. billyb
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    billyb Guru

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    1.5 x annual commisions
     
    billyb, Aug 6, 2019
    #4
  5. insurlegend
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    insurlegend Expert

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    Thank you so much!!!
     
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