Buying a Book of Business

Insurance agencies are bought and sold every day, but why should they matter to you? Is it ever the right time to purchase a book of business? Think about this: The average agency owner is 56 years old or older, and 20% of those agents are 66 or older. They are at the stage in their life where they are looking to retire, and their biggest asset is more than likely their insurance agency. To retire they need to sell their agency. This is where you step in.

Acquiring another book of business is an easy way to scale your agency, but before you purchase another agency, there are many things to consider. Do your due diligence and research:

  • Is this the right time?
  • How do I go about it?
  • How much will I pay?
  • How long does it take?
  • Where do I find an agency to purchase?

How do you know when the right time to buy a book is?

  1. You can afford to buy a book

If you are looking to grow your book of business, buy a book. This is a great way to add revenue within the agency and to build bonus income with a carrier. But before you jump on the chance, make sure you can afford it. Do you have a down payment, or will you be financing or buying out right? Make sure that purchasing a book of business aligns with your finances before jumping the gun.

  1. You have the staff power to service another book

Also, do you have the staff to service the new acquired book? If not, think about the cost associated with payroll. Many acquired agencies have different carriers than what you are appointed with, so make sure you compare the carriers prior to the purchase and state licenses. Some carriers may not give you the appointment and you might need to remarket those accounts. That too requires more staff work to remarket the accounts.

  1. The new book fits with your current book

Instead of randomly buying a book, make sure its appetite aligns with your agency’s focus. Know the risks associated with the new book, and make sure you are prepared to handle them. It’s also important to ask yourself how you are going to retain the accounts within the new book. It’s easiest if the new clients fit within your specialty market or other large portion of your original book since your marketing efforts would not need to change.

  1. You have the resources to pursue new-client relationships

Think about marketing tools required to reach out to the clients. Emails and letters about their current agent retiring, selling the agency, and introducing you are a necessary first step to building a new relationship. Also, you will need to reach out to each client either by personal email or phone call to formally introduce yourself and review their current coverages and needs. Retaining clients is an important part of acquiring a book of business.


What to look for in a new book

At first, it might seem tedious to purchase a new book of business, but there are some questions that can speed up the decision-making process. It’s important to note that a retired agent will typically have a more lucrative book than a new agent whose business is failing. Make sure to ask the selling agent:

  • How often do you reach out to each customer? Do you have a marketing campaign set up?
  • How many of these clients have a relationship to you?
  • If I move the location of the business, what kind of impact will this have on clients?
  • Are you completely retiring or remaining in the insurance business?

How much should you pay for a new book of business?

Now you need to figure out how much the selling book of business is worth. After you determined how much you are willing to pay, consider the profit margins of the purchase. You’ve heard that one-and-a half times or even two-times commission is the going rate for an agency, but think about the profit dollars. Ask yourself, “Will this book increase the agency profit percentage?”


Where can you find books for sale?

Do not underestimate the word of mouth selling technique. Many agency owners can generate interest just by telling other agents in their area. It pays to keep your ear to the ground and have conversations about expansion with other business owners. You’ll be surprised at the contacts you’ll make when you let other insurance agents know that you are looking to purchase a book of business. There are also websites available with lists of agencies for sale like Agency Equity.


To summarize, buying a new book can be one of the most rewarding investments in your career, but do your homework before purchasing. If the book is comprised of appetites you are unfamiliar with or that don’t quite fit with your current book, it might be best to pass until you find a more compatible one.


If you have any questions about how to buy a book of business, where to look for one, or would like a walkthrough of the process, reach out to one of ASNOA’s Agency Development reps. They are experts in the field of agency growth, and are looking to help more independent agents expand their businesses.

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