Transitioning from Captive agency to Independent agency

Working under captive agency or being independent is no doubt, one of the bigger questions people ask when running their company. Sure, being a captive is a safe way of kick-starting a business. With the parent company providing financial support, marketing, office space, and many more services depending on the original agreement captive insurance seems the best way to run a secure business. But sooner or later, you will seek freedom and flexibility with the right to all the profits from your own business. This is when you want to consider Transitioning from Captive agency to Independent Agency.

As compared to the dependent and supportive environment through which you grew your company to what you are now, you are planning to run your business on a clean slate. Before transitioning from captive agency to an independent agency, be sure that you are willing to face the challenges that you might come across while trying to become independent.

As being independent, the first question you ought to ask yourself is: Am I up to face the challenges of going independent? Below is the list of things that you need to keep in mind if you are planning on Transitioning from Captive agency to Independent Agency.

How to transition from captive agency to Independent agency

Transitioning from a captive agency to independent agency

1. Acquiring a book of business

Before anything, when going independent, your main course of action needs to be owning a book of business. Securing clients can be a real challenge and a threat to your business of interest. As your current book of business most likely belongs to your parent insurer, you will need to find a way to build up one of your own books.

You might consider pulling in the clients from your old book of business, buying a new book or starting a new book, depending on your preferences. You need to comply with your previous non-solicitation agreement and restrictions before reaching out to your old clients. Whatever the methods, you will need to make a good amount of effort to pull in customers from any direction possible and more importantly, give them a reason to stick around.

Starting by depending on your direct network is always useful. Market your product through digital and physical sources to increase customer through social media, websites, local communities, and various other foundations. As an independent business, you will not have any territorial restrictions, giving you the freedom of freely marketing your agency and your services. You might have to step out in the unknown but being independent requires you to personally going through the hardships.

2. Financial stability

In the early stage of business independence, it is all about survival. To reach a level of self-sustaining business, you will need a stable financial source to get you through the early stages of independence. Your funding is vital here as it will not only decide your present but the future state of your business.

Financial assistance from third-party organizations (like Candor) and loan can always fill a certain amount of gap in your findings but your main source of funding should not depend on anyone else but you. This requires you to have a definite cash-pool that you can fully depend on, may it be your savings, friends or family, or any other stable finance source that is independent.

Having a cash flow that covers basic expenses like rent, bills, salary and such will reduce a huge amount of load off of your back. You need to be able to financially feed your personal needs and your business needs through your own independent finance as depending too much on external sources for the expense is only a temporary solution and will provide to be a huge burden in the future.

3.  The business strategy

With stable economics and appropriate book of business, you will need to set out a proper strategy to make sure your business keeps up with the market and finds success instead of bankruptcy.

The basic business strategy is to secure the funding and the organization of your agency. A stable business structure with defined service plans, unique selling position, stable finance, proper organization and planning, and researched marketing is sure to thrive. Seek advice and directions from other successful business owners and always have an open mind. Consider the points below for a proper business strategy.

  • your business structure
  • your goals and objectives
  • your finance stability
  • the marketing strategy
  • agency organization
  • target audience

4.  Going independent

Going independent pretty much implies starting your own new business. Being independent means you are going to need your own office space, staff, websites, contact and agency systems, and much more. Ask yourself if you are prepared to go through all this trouble or not. Starting from the very scratch requires hardship and patience which will be the key elements to run your own business.

Transitioning from Captive agency to Independent Agency is not an easy job. This will require you to step out of your comfort zone and go through different phases of a business plan with ultimate hardship, patience, and investments. Keep in mind that there will always be heavy expenses with possible collateral damages, not only a clear path to profit before starting your own independent business.


One Response

  1. Nitesh Bhattarai June 13, 2019

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