I am looking at buying an Allstate agency and am curious on what is viewed as the best size to buy. The bank says they like larger books. Im looking at larger books as being obviously more cash flow, but more expense (loan, employees, ect) and having more contracts being lost on a yearly basis (85% retention). Seems like it takes a lot of work to keep the large book at a current rate and difficult to grow. Are smaller books better for more gowth?
What Size Agency to Buy?
- Thread starter ray628
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Personally, I'd buy as large a book as the bank would be willing to carry for me. First order of business for me would be to fix those persistency issues and get that number up to 90-92%which is closer to the industry avg. +20-25K revenue increase just by fixing that issue.
- 9,744
If it's Allstate Line 10 (standard) 90-92% is a good number. 85% is more like it for Line 19 (non-standard) business. Maybe lower.
- Thread starter
- #4
Thank you for your response. I am new to the industry and the book may be a $3 million allstate book. It seems like most of the books have been between 85-89% retention that I have been seeing, but maybe that is why they are for sale. What do you mean by persistency issues?
So you are new to all this and you just sorta decided that you would buy a 3mil agency...? And you have a bank willing to loan an inexperienced person a good portion of that for the purchase...?
I have one question... what is the name of the Bank...?
I find this interesting...
- Thread starter
- #6
New to selling insurance but not new to sales or financial services. I was a VA wholesaler for about 10yrs, so I have some experience in financial services. I really don't want to reveal my sources at this time but a few different banks I looked at dont require you to have a book first. Also, the bank is the one that told me I was better off buying a larger book so that I can get some income from it and not be so tight in the beginning. I was looking at $1.2 to 1.9 million books.
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