3 Steps For Starting An Insurance Business

If you are interested in starting an insurance business or becoming a licensed, independent insurance agent, there are a few steps that you need to take. These steps will help you obtain the necessary credentials and licenses necessary to practice in the insurance business. They are designed to give you a clear path to becoming an insurance industry practitioner and be able to set yourself up for success.

These steps are not in order in terms of what needs to be done but outline a roadmap to the activities necessary to get an insurance business started. Regardless of your level of expertise or the prior knowledge you may have about the insurance business, it would be helpful to consider these steps as part of your process.

Get Licensed

Obtaining an insurance license in the state or states in which you decide to conduct your business practice is a critical step in the process to start your insurance business. A license is needed in every state, including the District of Columbia, in order to solicit and sell any insurance product.

Advantages

•Establishes you as an insurance professional that is able to meet the needs oh your client with the appropriate insurance products and services.

•Gives you the required credentials to meet the licensure requirements of the state in which you conduct your insurance business.

Disadvantages

•Can be expensive, particularly if you have not completely identified the business opportunity appropriate for the clientele you plan to obtain.

•You are subject to regulatory oversight, examination and continuing education of the state(s) you conduct your insurance business practice.

Form a Brokerage Agency

Forming a brokerage insurance agency allows you the freedom and flexibility to represent various different insurance company products to your clients.  This freedom translates into greater choice and better service to your clients in meeting their insurance needs.

Advantages

•You have a wide range of insurance offerings to bring to the table to meet individual insurance needs.

•You are not captive to the whims of one company and forced to sell a proprietary or company product over what may be better to meet the client’s insurance needs.

Disadvantages

•You may not have the same contractual protections offered by captive and career agencies. Your contract may be subject to modification or change periodically during the course of the time you maintain a relationship with the brokerage firm.

•You are 100 percent responsible for all of your costs and expenses associated with operating a brokerage agency.
 
Join a Career Agency

Joining a career agency give you the ability to offer the insurance products and services of an individual insurance carrier exclusively.  This brings the financial strength and reputation of that company to the table when dealing with your clients who build relationships with you based on trust.

Advantages

•The costs of operating your insurance business are borne mainly by the career agency and captive insurance company that you work for.

•You are able to be in the insurance business for yourself but not by yourself.

Disadvantages

•Your product offerings are limited to the products provided by the company whom you maintain an exclusive relationship with.

Choosing to establish an insurance business can be fulfilling and rewarding for you.  You should careful consider the options in getting started in order to evaluate and consider the option that best fits your needs and circumstance.

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