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How to Start (and Run) a Successful Insurance Agency

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The insurance brokerage and agency industry in the United States is worth a whopping $161 billion. Would you like to join the industry and get a slice of the cake?

How to Start (and Run) a Successful Insurance Agency

If yes, you can start an insurance agency. For starters, an independent insurance agency is mainly responsible for selling insurance policies offered by various insurance companies to customers.

You find a customer, sell them an insurance policy, and you get paid for it. Sound like an easy way to make a lot of money?

It is, but first, you must put in the hard work. Starting a profitable insurance agency isn’t a walk in the part. But the experts are here to help you.

Continue reading for a comprehensive guide on how to start an insurance agency that will succeed.

Start Out as an Insurance Agent

Selling insurance, especially medical and life insurance, is heavily regulated across the U.S. This means starting an insurance agency isn’t as simple as starting a book store!

As such, the first step to setting up an insurance agency is to become an insurance agent yourself. The process of becoming an agent varies from state to state, but what doesn’t change is you need to obtain a license to practice in your state.

Once you’ve obtained the necessary qualification and licenses, it’s prudent to find work as an insurance agent. Yes, you could start taking steps to open an agency right away, but you won’t have any industry experience, which increases your chances of failing.

You can get hired as a captive insurance agent or an independent insurance agent.

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Captive insurance agents sell insurance for one company, which is their employer. On the other hand, independent insurance agents work for independent insurance agencies or brokerages, where they sell insurance policies from various companies.

Regardless of the types of insurance agents, you start out as the goal is to gain hands-on experience. Use this opportunity to hone your knowledge of the industry and develop excellent customer service skills. You’ll need these competencies when you start your own agency.

Write a Business Plan

Now that you have gained sufficient industry experience and are ready to become an entrepreneur, it’s time to write a business plan. This is an incredibly important document, yet some people start businesses without it.

Even if you’re starting out small, don’t assume that you’ll figure out things as you go. You need a business plan to guide you every step of the way.

A business plan fleshes out important details about your business, including name, address, mission and vision, sales and marketing plans, income projections, and more.

It’s essential to draw a detailed business plan. If you don’t know how to do it, you’re better off hiring a small business consultant to do the job for you.

This is also the best time to choose a legal structure for your business. It could be a sole proprietorship, limited liability company, partnership, or even a corporation. But which is the best structure for an insurance agency? Go with an LLC, since it limits your personal liability.

Register the Agency

Like any business, you need to register your upcoming insurance agency with the relevant authorities in your state. You’ll get a business registration certificate.

Depending on your state, you might also need to obtain additional permits and/or licenses. When this is the case, there are requirements you’ll typically need to meet.

For example, if you want your insurance agency to sell Medicaid, it’s possible that your state will want you to prove that you’re indeed licensed to sell Medicaid before they can authorize your agent to do the same.

Set Up Your Agency’s Office Space

Once you’ve secured the necessary registration certificates and permits, there’s nothing to stop you from setting up an office space. This is a big step toward making your dream to start an insurance agency come true.

Start by identifying an ideal location. This should be a busy business area and there shouldn’t be a big concentration of insurance agencies. If you choose a location that has several agencies, expect to face stiff competition for customers.

Setting up the office involves not only getting the necessary office furniture and equipment but also hiring one or two people to help you out. For instance, you might want to hire a receptionist who will be responsible for receiving customers and answering calls.

Get Selling

The office is set up. What’s remaining?

It’s time to start selling, but two things are missing. You have no product to sell, which means you need to reach out to various insurance companies and get more information about their insurance policies.

Remember, your goal is to help clients find the right insurance policies for their needs.

Two, you haven’t marketed your agency, which means potential customers don’t know about you.

Your business plan fleshed out a sales and marketing strategy. Put it to use. This will involve setting up a business website for your agency, creating social media pages, and even running digital ads.

You can also consider purchasing sales leads when you need quick results.

Start an Insurance Agency That’ll Be Profitable

Insurance is almost a basic need for most people. This means there’s a big market out there.

Starting an insurance agency is a good way to capitalize and possibly make good money while helping millions of people get insurance. Use this guide on how to start an insurance agency and run it the right way.

Keep tabs on our blog for more startup tips and insights.

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