Does Anyone Have Know How to Value an Annuity Agency?

gh2009

New Member
2
I have someone interested in purchasing my agency but I have no idea as to what its value is. Is there some percentage that I could use? The agency is about 99% annuities. Please help!
 
Are there any renewals? If so, do they go to the agency, or will they pass to the current owner?

Also, age of clients. Are they working and putting $ into retirement accounts or are they old and fairly set?

How many clients are out of surrender? How much $$ will be out of surrender in the next year or two and available for rollover?

How much $$ is tied is tied up in annuities with income accounts? Of that, how many clients are taking the income stream?

Are you cross-selling med-supps to clients?
 
You know that guy who does your taxes? He could help. He'd at least know someone who could help.
 
If only it was that simple. Most won't have a clue. It's going to boil down to residuals, rollovers and cross-selling (to an extent). Once he has a handle on residuals and rollover then he can start negotiating for x times annual and how involved he will be for x months/years.
 
If only it was that simple. Most won't have a clue. It's going to boil down to residuals, rollovers and cross-selling (to an extent). Once he has a handle on residuals and rollover then he can start negotiating for x times annual and how involved he will be for x months/years.

Exactly.
Residuals are the biggie, especially for VA business. Hopefully you have been taking opt 2 or 3. Then it comes down to potential rollovers and such.
But the first thing a knowledgeable buyer will look at is what kind of yearly cash flow are they going to immediately receive. Thats your starting point.


A wholesaler told me the other day about an agent in the lower part of my state who recently sold her book. She had a huge book of business, mainly VAs.
Because she had chose opt 1 for all of them she had almost no real residual income to speak of considering she had over 1000 VA clients.
She could have received a couple mill for her whole book if she had chose opt 2 or 3. Instead she only got $400k!

It pays to think about the future if you plan to be successful!
 
A good lesson to learn.

She could have received a couple mill for her whole book if she had chose opt 2 or 3. Instead she only got $400k!

It pays to think about the future if you plan to be successful!
 

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