Buying or Selling a Book of Business
Below you will find articles written by LSM Insurance designed to be a resource for brokers looking to buy or sell their book of business. The information comes from Cameron Jacox and James Hilton, managing partners of Jacox-Hilton Producer Consulting. We hope you’ll find these resources helpful and the wealth of knowledge presented here expansive.
Posts on Buying or Selling a Book of Business
One of the key questions all advisors in the market for a book of business are wondering in one way or another is how to tell the difference between a book to avoid and a book that's worth buying.
The widely accepted and so-called "traditional" method of valuing a life insurance book of business favours buyers. Downplaying the value of a book has led not to a buyers market but to a market in which there are almost no sellers.
LSM Insurance and the book valuation experts at Jacox-Hilton Corporation have taken you through the purchase of a book of business, but the question becomes, "What do you do with the book once you have it?"
If you are an advisor looking to buy or sell a book of business, the market for investment books determines whether or not you'll be able to find a book to buy at all or what you can expect to sell your book for.
Valuation is an integral part of determining the value of a book of insurance business. Cameron Jacox and James Hilton, managing partners at Jacox-Hilton, a software and consulting services firm for life insurance advisors, will tell you that they conduct a book valuation based on five points of criteria:
Selling a book of business is most often an integral part of estate planning for advisors nearing retirement.
Those advisors who wish to move on from the insurance business and are in need of a successor will be looking to sell their book of business. Cameron Jacox and James Hilton, managing partners of Jacox-Hilton Producer Consulting, are experts not only when it comes to selling a book, but also when it comes to maximizing its value for potential buyers.
When assessing the value of your MGA, don't expect the same level of consistency as you would when assessing a bottle of wine: neither individual books of business, nor MGAs have aged very well.
A great New Year's resolution insurance brokers often make is to grow their business. They can do this rather quickly by acquiring books of business from other brokers who are selling their books.
As insurance and investment advisors reach retirement age, they start thinking about divesting their books of business and selling it to the next advisor who can manage the needs of their various clients. However, there are a few things every advisor should know going in when they're about to take the plunge and sell their book.