How to become an independent insurance agent?

At present, various insurance companies are looking to reach out to potential customers with the help of independent agents. Due to this, there is an increasing number of people setting themselves up as independent agents. If you’re looking to become one, here’s how:

Guide to becoming an independent insurance agent

How to become an independent insurance agent

Getting Licensed

The first step on the road to becoming an independent insurance agent is to get proper licensing in the state you want to work. To get licensed, you will need to take a licensing course and pass the exams that are policed by the state itself. However, each state has a unique set of requirements that need to be fulfilled, some of which require certifications, multiple licenses for different types of insurance and continual courses even after a license has been acquired.

On top of that, it’s important that you continue learning about the industry even after you’ve gotten your license so that you get regular updates about state laws, tax regulation and changes in the market so that you can offer the best service to your clients.

Building Relations with insurance companies

The next step in becoming an insurance agent is building relationships with established insurance companies to that you can represent them in the market. Many big companies aren’t quite enthusiastic about partnering with new independent agents. Hence people with a couple of years’ experience in the field have the upper-hand compared to new agents.

However, it helps to be prepared. You increase your chances of partnership with big companies if you show them that you’re dedicated and fully-prepared with a set of definite plans on how to get started. For this, you can compile a list of a couple hundred potential clients to show that you can bring in as much business as an experienced independent agent.

Many independent agents work with around 20 insurance companies, where around 15 of them are P&C insurance companies and the rest are health/life insurance providers.

Setting up your business

Starting an independent agency is not cheap. It can cost anywhere between $5000 to $40000 to set up your business. There are some essentials for insurance business such as Agency Management System, Financial Management system, support staff, brick and mortar office, marketing expenses and more.

Thus, before moving forward, it’s suggested that you prepare a business plan to round out all your costs and expenses. This way, you’ll have a proper idea of how much expense you’re going to incur while starting off and after you start your operations. A business plan will also help you understand the legalities and procedures for setting up an independent insurance agency.

Bottom Line:

  • Independent Insurance Agents are those individuals who are not bound by a single independent company but can sell policies from multiple companies
  • The first step on the road to becoming an independent insurance agent is to get proper licensing in the state you want to work
  • Many independent agents work with around 20 insurance companies, where around 15 of them are P&C insurance companies and the rest are health/life insurance providers

Final Thought

As enticing as it is to become an independent insurance agent, it can be a lot of work. However, due to modern technology, a lot of the work can be automated. To know more about how technology can help your business read the next article:

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