Headed Toward The Goal Of Owning Your Own Insurance Agency
Your goal: owning your own insurance agency. Once you have made the resolution to work for yourself, surveying your own expertise and the resources at your disposal is just the beginning. So you are an excellent salesperson and you have a good reputation with other business professionals but have not worked in the insurance business. The next query: Are you interested in becoming an independent agent or working for an established national insurance office such as Farmers or Allstate? If you choose to go into business with a national insurance agency, you will find that they have their own training plan and will help you attain your license and get the instruction you need. If you desire to be an independent agent, you have some hard work ahead of you; however, you are making an exciting investment in your future.
As an independent agent, your highest priority is to get licensed. Telephone your home state's department of insurance to learn the conditions for becoming an insurance agent. Each state supervises the insurance market and its agents in order to maintain consumer protection and to develop a fair and efficient way for insurance professionals to compete. They also have techniques for investigating and regulating agents and investors in order to protect against fraud.
While reviewing the state fundamentals, decide what type of insurance you want to handle. The types of insurance are personal lines, property and casualty, and life insurance. Personal lines are the most generally known and include non-commercial products such as auto and homeowners insurance. P&C (Property and casualty) lines consist of advanced personal and commercial insurance like professional liability and commercial auto insurance. Life insurance is a good product to add to your wares because typically this type of insurance clears the best commission.
Next, be prepared to pursue the education and training appropriate to obtain your license. Some educational resources available online include Kaplan University, AdBanker and WebCE. These organizations offer professional and continuing education seminars to help prepare one for licensing exams and to abide by the state requirements for license renewals. Note this: if you select online classes, verify that the seminars meet the requirements in your state. Most states call for some professional type of training in ethics and some specific area such as flood insurance. Contact the department of insurance to discover what these requirements are in your state. Bear in mind that once you have secured your license you need to meet continuing education requirements in order to renew your license each term.
For small business owners, it is smart to contemplate forming a limited liability company (LLC) or corporation in order to guard yourself from personal liability claims. Analyze this concern with your lawyer and/or accountant. They will be able to instruct you on this point and assist you in obtaining a business license. By establishing a legal business entity, you can protect your personal assets and make your company more credible.
Obtaining funding for your venture will require some homework on your part. Engage in conversation with your attorney, accountant, public relations professionals and business experts as resources in evaluating your needs and for a hand in executing a focused business plan based on your objectives. Your local Small Business Administration or similar organization can offer advantageous support by letting you know what you need to do to secure financing and resources for your new firm. If you are seeking financing, be ready to offer detailed accounts about your start-up expenses and any capital needs you may have. Lending institutions will review your proposition and assure you have a trustworthy business agenda before they take the risk involved in making a loan to you. Another beneficial resource to consider is your professional connections, friends or family who may be willing to invest in your business.
Be mindful to procure protection for your business. You need to get a surety bond. A surety bond is akin to insurance in that it pays the consumer if a contractual service or agreement has not been satisfied as agreed. You will also have to obtain errors and omission (E&O) insurance. Most insurance companies that you work with will require you to have an E&O policy in force.
Now that you are licensed, get assigned by insurance underwriting companies. As an independent agent, you will have to approach the insurance carriers and sell yourself. So be prepared to share your business agenda and plans for growth so that they can conclude if you are worth the exposure or investment. It is helpful if you have an inside sponsor who can assist you with the appointment process. This endeavor will probably be the most difficult roadblock you have taken on so far. If you have difficulty getting selected by these companies, initially you may want to use a surplus lines broker or managing general agent (MGA) such as Insurance Noodle or Smart Choice. Routinely, these MGA firms charge a membership fee and take a portion of your commission for supplying access to insurance companies that quote and guarantee your policies. Another means for a start-up agency gain membership in a cluster, alliance or network group such as ISU Network which uses the power of the organization to get appointments. Even though those fees increase overhead costs, it gives you flexibility in the products you can offer and allows you a chance to increase clientele and experience.
Understand your target market and prepare to sell. If you have formerly worked as an agent for a captive or national insurance company, give consideration to any non-compete contracts with those companies before you petition your previous clients. If this arrangement exists, discuss the constraints with your lawyer so that you do not breach any state laws. If you are just starting out as an agent, observe that selecting the appropriate agency name can be a cunning ingredient of your business agenda. Utilizing your name in the agency name increases recognition and helps clients identify you more easily. Make sure to investigate the local advertising channels such as the yellow pages, your local newspaper or chamber of commerce depending on your target market.
Creating a website should be an essential part of your marketing policy. Have it up and running from day one. Be sure to take advantage of the opportunity to advertise your business via social networking sites like Facebook. By adopting these resources you can educate people about your new business and collect referrals while building your client base. Be sure to keep these posts personal with an occasional marketing ad-you don't want to be tagged as a spammer.
As you acquaint yourself with the peculiarities of the insurance industry, you will learn about ACORD, a global non-profit organization that develops standards and systems that help the insurance and related financial industry in the assimilation of facts. They have developed systematic forms, known as ACORD forms, to automate the gathering or amassing of data. In order to meet legal and standardized requirements you will need access to these forms especially if you choose to sell P&C lines. A thorough evaluation of ACORD licensed software systems will allow you to make the best choice for your office. Most of these software systems will help you automate the process of maintaining your customer database and allow access ACORD forms which helps reduce the data entry workload and assists in accurate record-keeping.
As you assess your office management needs, you need to review your procedure for retaining records and being acquainted with information that can pertain to your business. A lot of insurance companies obtain various software systems such as insurance rating systems and customer relation software in order to be more productive. You should place precedence on purchasing an agency management software system to help in keeping good and reliable records on your clients and their policies. A reliable agency management system should efficiently manage your customer database and save you time and money.
Founding an insurance firm is no small task. If you are prepared to roll up your sleeves and get to work, with some determination and lots of persistence you will be able to cultivate a strong company and you will be proud of the investment you have made in your future.
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