by cws611 » Mon Nov 30, 2009 02:50 pm
Hi,
I'm an agent that has three years of experience. I've never acquired an agency before. I'm looking into buying a a Non Standard Auto book of business. I'd like to know what are the main questions to ask so that I may valuate the agency properly. I have some main points covered already like retention ratios, the trend of the book from the last five years, etc.
Any tips or advice would be gladly appreciated.
Thanks.
I'm an agent that has three years of experience. I've never acquired an agency before. I'm looking into buying a a Non Standard Auto book of business. I'd like to know what are the main questions to ask so that I may valuate the agency properly. I have some main points covered already like retention ratios, the trend of the book from the last five years, etc.
Any tips or advice would be gladly appreciated.
Thanks.
Posted: Tue Dec 01, 2009 12:40 pm Post Subject:
You'd better keep an eye on certain factors-
History of losses
Claims associated with E&O
Accounts that fetch less premiums vs. higher premium accounts
Personal network vs. commercial accounts - their types
Accounts with specified carriers and accounts with non-preferred carriers - Roddick
Posted: Tue Dec 01, 2009 05:49 pm Post Subject:
I'd be interested to know what a substandard book would sell for. In our area the persistency on that type of business is low enough that it's not something we "try" to write.
You have a marketing angle to cross sell or supplement the existing book?
I'd be primarily concerned with the carrier contracts that I'd be getting. Are those carriers stable in the state ? Good history of rate stability ?
Posted: Tue Dec 01, 2009 08:02 pm Post Subject: Carrier Contracts must be stable
I purchased a non standard book 3 years ago, The biggest mistake was not talking to the carriers ahead of the sale, the agent made long term promises that I could not keep. In my agency we have plan to help clients out of the non standard market in two years it works, but some of the carriers wanted to cancle the appointment after I made the purchase. Advice talk to carries before the sale
Posted: Wed Dec 09, 2009 05:05 am Post Subject:
Thank you everyone for posting comments. I will take all of these factors into consideration.
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