Interested in starting an insurance agency?
Building an insurance agency is no small task, but with some sweat equity and the right focus you can turn your dream into a reality While it can be a lucrative market to enter, there are a few steps you need to take first to lay the foundation of a successful insurance company
Insurance is an essential part of day-to-day life for the majority of Americans, from driving their cars to protecting their homes. This means that insurance companies don’t necessarily need the economy to thrive to achieve profit and success
How to Start an Insurance agency Company
Here are the most important steps required for starting an insurance company.
Write a business plan
A sound insurance agency business plan is a road map for success, and it puts your insurance company on the right track. This document demonstrates your commitment to any potential stakeholders, such as investors, employees, and insurance carriers.
It also helps you:
• Set goals
• Avoid potential roadblocks
• Identify risks
• Determine financial needs and resources
Your business plan may be adjusted over time. Ideally, it will provide guidance long after your insurance agency is launched
Consider Investment Capital
You will need startup capital to cover things such as office space, equipment and furniture, E&O insurance and marketing. And, don’t forget that you have to pay yourself
If you want to start an insurance company, then it is necessary for you to obtain an insurance license first. In the U.S., you must obtain this licensing from the National Association of Insurance Commissioners – the organization that regulates the insurance industry. The licensing process is time-consuming. You must obtain a license for each state you intend to work in, as well as each
kind of insurance you intend to sell.
Choosing a Location. Physical or virtual office
You have three options for your office location:
• Work from home–.
• Lease commercial space with substantial rental payments.
• Lease a virtual office unit with minimal rent payments.
Chances are the choice is obvious.
Does it matter if my location is near another insurance agency?
Commercial locations like malls or business centers may limit the number of agents. Otherwise, common-sense rules. Check a map of your area and see where all the agencies are now. Look for a glaring gap. If there isn’t an obvious hole, do what you can to slide between the others. Get as far away as you can and still stay near customers.
Gain Access to Insurance Carriers.
After you are licensed, you will need to have access to insurance companies to have insurance products to sell. In order to get an appointment to sell insurance with many companies, you will need a marketing plan, some background in sales, and a solid business plan. Research your anticipated client base and know what companies will best serve them.
If you want to sell insurance, you also need to affiliate your company with an insurance carrier. Insurance carriers affiliate themselves with certain insurance companies who will sell their products. Often you need to prove your worth to carriers before they will provide you access to their products. This is usually done by showing them a business plan and who your current clients are.
You may also need to commit to gaining a certain number of customers a month for this carrier in order to sell their products. It is helpful to have at least a few years experience in the industry before trying to sign on with an insurance carrier.