I am trying to purchase an independent agency and 80% of their book of business is under one of the outlets.
Not confirmed buyout clause yet.
The seller asking 2X commission; but not sure if it is okay to purchase a book of business that are mainly under the wholesaler.
Trying to purchase an independent agency; but issues..
Moderators: Josh, independent guy
-
- Insurance Journal Addict
- Posts: 49
- Joined: Thu Jan 08, 2009 2:23 pm
Re: Trying to purchase an independent agency; but issues..
Obviously get in writing whatever exit requirements are in force before you sign onto anything.
I bought a book of business that had some with a national carrier, but it was through a MGA. The exit requirements were not spelled out in the contract, but they fought like mad to prevent me from rolling it into my direct appointment. I only prevailed because there was nothing in the contract that prevented me from taking to my direct appointment. Otherwise, they would've held fast and they would have severely affected the value of the book from my perspective.
I bought a book of business that had some with a national carrier, but it was through a MGA. The exit requirements were not spelled out in the contract, but they fought like mad to prevent me from rolling it into my direct appointment. I only prevailed because there was nothing in the contract that prevented me from taking to my direct appointment. Otherwise, they would've held fast and they would have severely affected the value of the book from my perspective.
-
- Insurance Journal Addict
- Posts: 350
- Joined: Tue Mar 14, 2006 11:04 am
Re: Trying to purchase an independent agency; but issues..
If by using the terms 'outlet' or 'wholesaler' you really mean cluster or consolidator or MGA, then that infers to me that you don't really have the experience in the industry to be plunking down a bunch of your hard earned money to buy an agency.
With what I'm concluding is your level of experience, if you're really dead set on entering the world of agency ownership in this manner, then I would run, not walk, to an experienced business broker who deals with agency acquisition day in and day out and pay whatever their consultation fee would be to hold your hand and guide you through the process. Any monies paid to an expert will save you multiples and allow you to proceed with minimal pain.
With what I'm concluding is your level of experience, if you're really dead set on entering the world of agency ownership in this manner, then I would run, not walk, to an experienced business broker who deals with agency acquisition day in and day out and pay whatever their consultation fee would be to hold your hand and guide you through the process. Any monies paid to an expert will save you multiples and allow you to proceed with minimal pain.
-
- Insurance Journal Addict
- Posts: 81
- Joined: Mon Nov 15, 2004 4:01 pm
- Location: Hayward, CA
- Contact:
Re: Trying to purchase an independent agency; but issues..
Way to go d's insurance store. Right On !!!!
-
- Insurance Journal Fan
- Posts: 3
- Joined: Wed Jan 14, 2015 11:24 am
Re: Trying to purchase an independent agency; but issues..
I agree with d's insurance store. An M&A expert can also help you make sure that you are addressing the prior liabilities/E&O exposure adequately if you have not already done so. Good luck.
Re: Trying to purchase an independent agency; but issues..
good advice
Frank Medina, Agency Owner, Mentor, Founder of IANS Insurance Agent Near Me
https://insuranceagentnearme.directory/
https://insuranceagentnearme.directory/