purchasing book of business 1.1X Call center Auto

mikem2015

New Member
15
I am look at purchasing a book a business in auto from a call center the multiple is 1.1X profit since if it's a call center will the retention rate me lower since people won't have a connection with the owner of the agency? Or will they just be looking for a better deal on the renewal and not care about having a connection between the owner?
 
I am look at purchasing a book a business in auto from a call center the multiple is 1.1X profit since if it's a call center will the retention rate me lower since people won't have a connection with the owner of the agency? Or will they just be looking for a better deal on the renewal and not care about having a connection between the owner?

You will absolutely have a lower retention rate not just because of the "frequent shoppers" being your primary source of clients but also for the plethora of underwriting and follow up issues that will arise.

That being said it is priced with that in mind if its at 1.1x. Hopefully they provided a 3 year spreadsheet or reports from each carrier. If so you can easily compare the retention and more importantly, loss ratios. If LR is 100+ for 2021 & 2022 be vary careful. I'd almost guarantee its 100+ for 2023 so you can throw that our for now.
 
When purchasing a business, particularly one like a call center, it's essential to consider various factors beyond just the retention rate. While the absence of a personal connection with the owner might impact retention to some extent, it's not the sole determining factor. Customers primarily look for value and service quality when renewing contracts. If the call center provides excellent service and competitive pricing, clients are more likely to renew regardless of the personal connection. However, it's still vital to maintain a good rapport with clients through exceptional customer service and consistent communication. Additionally, assess other aspects such as the call center's reputation, client base, employee turnover, and industry trends to make a well-informed decision. Conduct thorough due diligence to understand the business's strengths, weaknesses, and growth potential before finalizing the purchase.

Someone is obviously using the hell out of the Chatgpt tool.
 
Back
Top