OFF-MARKET-402 Policies in Force, Portable 60% Comm – Insurance Book of Business

OFF-MARKET ‘Q1 2022

402 Policies in Force, Portable 60% Comm. Insurance Book of Business!
Los Angeles, CA (Los Angeles County)
Seller Financing Available!
Zip Code: 90001

• Asking Price: $275,000
• Cash Flow: $41,979
• Gross Revenue: $194,291
• EBITDA: N/A
• FF&E: N/A
• Inventory: N/A
• Established: 1981

Business Description

A total of 402 insurance policies created gross revenues of nearly $195,000 (in 2017) at this 37-year-old agency. 60% of accounts are commercial, 30% are personal, and 10% are life/health related. A high percentage of reoccurring clients speak primarily English and Japanese. With only 1% of clients coming in to make payments (85% are direct billed and 15% are agency billed), the book is highly portable. Net Income after recast is $41,979. Profits could increase for a strategic buyer with an existing operation and can thereby eliminate some expenses or share others. Seller is running this sub-optimally profit-wise.

NDA is required for first round package on the book of business crafted by ProNova Partners.

Detailed Information

• Employees: 2
• Facilities: The location has been established for 32 years with minimal competition nearby. Approximately 700 square feet of office space in a small retail center rents monthly for $900. Month to month lease.
• Competition: There are two other players in the local vicinity and a number of other competitors as you expand outward, but not an immediate competitive threat because each player has a different niche.
• Growth & Expansion: This book of business is portable. Seller recommends that the new owner hire producers to develop new accounts.
• Financing: If the price and deal structure are right.
• Support & Training: 4 weeks at 20 hours per week.
• Reason for Selling: Retirement.

Business Trend:

Industry Consolidation – Consolidation continues among agencies and among insurance carriers, largely in response to the wider insurance needs of business customers. Some agencies have historically grown through acquisitions. Consolidation may slow down during recessions due to declining revenues and limited capital in the industry.

Telemarketing and Call Centers – The importance of the contact center, along with other service technologies, is also changing how consumers interact with insurance agents. Some insurance agents who want to reduce the cost of customer service are replacing live telephone assistance with interactive voice response (IVR) systems, web queries, or online transactions. However, many agents create brand recognition based on personal service and must be able to deal with many customers who demand to speak to a live customer service rep.

Industry Opportunities:

Investment Products – With intimate knowledge of an insurance customer’s financial situation, insurance agents are in a good position to sell other financial products. Such products and services include annuities, stocks, and retirement and estate planning. Agents have to be licensed to sell other financial products in the state in which they do business.

Consulting Services – The increased complexity of financial and risk management gives agencies an opportunity to expand their role as consultants and advisers, especially in the commercial segment. For example, more insurance agents are providing risk management services to small and midsized business clients who often can’t afford a risk manager on staff. Insurance agents are using consulting to build stronger relationships, retain existing clients, and attract new ones.

Bright Outlook

To maximize profits and grow revenue a Buyer may consider: – Developing and implementing a Website to facilitate the creation of quotes, to accept payments, and participate in modern social media platforms to attract younger clients. – Bringing in a second licensed agent to step up sales efforts. – Advertise services to the neighboring Japanese speaking community.