Starting an Insurance Agency

Starting your own insurance agency is not going to be accomplished overnight. These are preparations to be made such as obtaining the proper licenses, hiring employees and most importantly building a customer base. Running an insurance agency requires a thorough understanding of insurance and individual insurance companies.

Before even thinking about starting an insurance agency all insurance agents need to be properly licensed. Agents need to be licensed for the state they intend to operate in and any other state in which they intend to sell insurance. Getting licensed usually involves paying to a state agency such as a Department of Insurance and passing a licensing exam. Once licensed an individual can be a captive agent or an independent agent. A captive agent is one that sells the insurance exclusively for one company such as State Farm. An independent agent is free to sell insurance for any company they are currently licensed with.

Another part of starting an insurance agency is hiring employees to work at the agency. Keep in mind that only licensed agents can sell insurance. With that said agencies are always in need of customer service representatives. These are people there to take all of the prospective client’s information and generate a price quote. Normally, starting a new business does not require very many employees because it is not very big. Most local insurance agencies start small and grow depending on how many policies are being sold and where they are selling the policies. Starting an insurance agency is no different than starting a small business because that is exactly what it is.

Many people who want to own their own agency usually start out by working for an agent who is already licensed. This in turn allows an individual to learn the business from the ground up. In many cases people who start out this way may end up buying the agency from the current owner. This does two things for the agent. One, they already have an established customer base and two, they will not need to hire all new employees. Individuals that branch out on their own need to advertise and slowly build their customer base which can take time to do. After all if an agent does not have customers to sell to there is no one to buy the insurance.

Starting an insurance agency requires a thorough understanding of the insurance industry. If the agent is independent they need to know the policies and procedures of many different insurance companies that they want to write business with. This requires a lot of work and patience when starting a new agency.