Due Diligence

[new_agent]

I have been captive for several years and looking at purchasing an independent agency. Please help with advice on metrics to review to determine the quality/health of the agency.

Growth has been steady at 20-30% per year. I am going to request policy counts, premium paid, and commission statements from each company the agency has a relationship with. I will also request loss ratios for each company.

Any other thoughts or recommendations?

 

[Guest]

how much PL vs CL

How much Preferred auto vs sub-standard auto,

Will the current carriers accept you as an agent?

If he is growing at that rate, why are they wanting out?

How long will that agent stay on to help with the transition?

Will you retain the office staff? Thats probally where the relationships with the clients really are.

 

[new_agent]

I'm under the impression that the vast majority is PL. I will request a break down.

The agent claims that most is preferred, but I have not seen any proof (is there any?).

The agent is confirming that they will accept me. I should have this answer soon.

He wants out due to health/retirement reasons.

He will stay as long as needed.

Yes, all staff members are saying they would stay.

 

[Guest]

so your trusting this agent you dont know, well, hell, I have a bridge to sell you that crosses the desert......

How in the hell would an agent know if the carriers would accept you? maybe they have new agent freezes on? I would "assume" if the book is big enought they would add you to keep that business, but how would a agent know?

Thats YOUR job to research and discuss with the carrier reps, sometimes it can take 2 months to get approval from a carrier, so how are you going to handle all that and commissions etc?

Sure Sub standard will appoint you damn near on the spot, but preferreds dont.