6 Tips for Starting an Insurance Agency
Thinking about taking the plunge? Here are 6 tips to get you started.
There are many potential benefits of starting your own insurance agency, but it can be an overwhelming step to take – regardless how long you’ve been in the insurance agency or whether you’ve previously owned a different kind of business.
Here are six things to consider as you prepare to hang out your own shingle:
1. Decide What Products Your Agency Will Offer.
Although it may seem basic, you need to consider what types of insurance solutions your agency will provide. That may be life and health products, property and casualty policies, specialized coverages like course of construction or professional liability insurance, or all of these lines.
You will also need to decide whether you’ll focus on commercial products or prefer to provide personal lines coverage.
These decisions can inform and impact the way you market your services, what type of technology you need, and more.
2. Create a Business Plan.
You should also create a detailed and well thought out business plan. This is an important step for several reasons.
First, solidifying your goals in writing is the first step to achieving them. Your business plan will also drive decisions about office space and hiring staff. Insurance carriers may want to see evidence of your business plan before appointing you, too.
Last but not least, if you want to apply for financing from a local bank or credit union, they will want to also see that you have a solid and realistic business plan for your agency.
3. Choose Technology Hardware and Software.
As with any business, you’ll need technology solutions that can support your agency and help you grow.
Buying specialized agency management software is not absolutely required, however it may help be more efficient and effective by reducing the time you spend on administrative tasks.
You’ll also need to determine your hardware needs today – and based on where you want to be several years down the road.
4. Decide on a Marketing Strategy.
To be successful, your insurance agency will need customers. Who are your ideal customers, and how will you reach them?
Consider various approaches to marketing, including person-to-person networking, social media, direct mail, print advertisements, billboards, signage, etc. Most successful insurance agencies use a combination approach.
The best marketing strategy for your agency will be driving in large part by the types of products you offer and the types of customers you want to target.
Create an initial marketing plan but don’t be afraid to modify it over time as your agency grows and changes.
5. Get Appointed with Carriers.
Before you can offer products to your agency’s new customers, you’ll need to get appointed with insurance carriers.
This can be a time-consuming and arduous process but stick with it because you need those appointments. Be prepared to provide proof of licensing, errors & omissions coverage, your agency’s business plan, and to sign contracts and agreements with the carriers.
Before signing anything, understand whether the carrier you’re partnering with has minimum production or other requirements for agencies. If you’re not comfortable with terms, ask if they’re open to modifying the agreement.
6. Determine Whether You’ll Start from the Ground Up or Buy a Book of Business.
You’ll also need to decide if you will be starting your new insurance agency from scratch or buying an existing book of insurance business.
Buying a book from another agent or agency can help you hit the ground running, but it also means your agency is responsible for servicing those clients – whether or not you’ve earned any commissions from them.
If you’re considering buying a book of business, do some due diligence first to lessen the risk of inadvertently buying problem policies.
Get Your New Insurance Agency Off on the Right Foot. Partner with Voldico.
If you have decided to start your own insurance agency, congratulations! At Voldico, we understand the challenges insurance entrepreneurs face. We offer independent agencies turnkey tools and solutions designed to help them get greater access in the insurance marketplace, leveling the playing field.
With options including full operational support for your back office, access to more well-known and trusted insurance carriers, and networking events with other insurance professionals, Voldico can provide the support your new agency needs – with no membership fee!
For more tips on starting your insurance agency and to learn more about membership, contact us today.