What is the typical multiple for sale of Medicare Book of Business?

[Krus]

• Hello,
• I have recently lost a book of Medicare Advantage business due to the fact that my FMO didn't renew his license in my state, so I was "terminated", which caused me to lose the book. Does anyone know how a book like this would be valued? Is there aa website or anything written I can refer to to get that info? The FMO wants to offer me cash for one year of residual as a settlement. I don't think that is a fair price, but I need to be armed with some type of written article that sates how these things are valued. Any opinions or advice would be appreciated. Thank you so much.

 

[axeman462]

Awhile back I considered selling a block of my book. I got offers in the range of 2.2 -2.5x the value. The entire block was MAPD.
Many of the offers came from independent agents and agencies. But there was one firm that I remember that gave me an offer, it was Access Capital Group. I seem to remember they had a calculator on their website that you can use, but the value it gives you is a little on the low side.

 

[somarco]

How big is the "book"? When did you lose it? Do you have time to rewrite with a different carrier? Why is the FMO offering anything on a book that (presumably) where they will earn nothing?

 

[BuckNasty]

I recall a thread like this in the past and the replies were indicating that agents were being offered about 1.8x for Med Supps. I guess MA would be different. 1.8x seems pretty lame.

 

[somarco]

I recall a thread like this in the past and the replies were indicating that agents were being offered about 1.8x for Med Supps. I guess MA would be different. 1.8x seems pretty lame.

Most agents would get more by renewing their license and AHIP and riding it out into the sunset vs selling it. Renewals eventually go away by attrition if you never do anything for your (former) clients

 

[WCMason]

Most agents would get more by renewing their license and AHIP and riding it out into the sunset vs selling it. Renewals eventually go away by attrition if you never do anything for your (former) clients

Exactly. Even if you abandoned servicing a book of business it would create income far better than two times earnings. Unless someone needed a lot of cash up front and could get someone to pay it, I can't see any circumstance where selling would be better than holding.

 

[DS4]

Exactly. Even if you abandoned servicing a book of business it would create income far better than two times earnings. Unless someone needed a lot of cash up front and could get someone to pay it, I can't see any circumstance where selling would be better than holding.

That is mine and my brothers plan! Close the doors. Give the ee's a severance package, keep certs and CE up to date, and, get new cell numbers. Provide no service.

 

[Rob Lion]

Wait things like this can happen? i thought you own the bob?

 

[somarco]

The agent may own the book but the carrier has a say in whether they will recognize a new AOR.

But why sell it when you can live off the renewals a few more years. You could also write new referrals if you wanted. Don't pursue new business but take what falls in your lap. That is probably what I will do.

At least until I decide to go off the grid and just collect renewals until they dwindle down to nothing.

 

[Rob Lion]

The agent may own the book but the carrier has a say in whether they will recognize a new AOR.

But why sell it when you can live off the renewals a few more years. You could also write new referrals if you wanted. Don't pursue new business but take what falls in your lap. That is probably what I will do.

At least until I decide to go off the grid and just collect renewals until they dwindle down to nothing.

Im still confused if he doesn't take the settlement will he still get renewals?