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Going independent can offer an insurance professional more control over the products to work with, the clients they serve, and how to build their book of business. Independence also comes with obligations that extend beyond policy sales.
The process of how to become an independent insurance agent primarily consists of licensing and then transitions to a business plan, carrier relationships, compliance, and client development if you are researching a career in this field.
Step 1: License Needed
Insurance, on the other hand, the area credentialing folks often enter into − tends to be regulated, and thus, has location-based licensing requirements.
Check the applicable rules where you want to operate before starting. Requirements may include:
- Pre-licensing education
- A licensing examination
- Background checks
- An application
- Continuing education
The type of insurance you sell may also impact the licenses that you need.
And just because you have a license in one place does not mean that this gives you permission to operate in another.
Step 2: Select Your Insurance Specialization
From the first day of your business, confusion can come when trying to sell every type of insurance.
You can either choose a general area or an area first.
Property and casualty, life, health, motor, or commercial insurance.
When everything is somewhere in the middle, your marketing has to be more catch-all, and you miss out on being an expert on a particular product.
Develop the Foundation of Your Business
Being an independent insurance agent is also about knowing the business.
You might have to develop a business structure, secure the proper insurance, build an accounting system, and set up protocols for managing client information.
Have a very simple business plan in place covering:
- Target customers
- Services offered
- Expected expenses
- Marketing methods
- Revenue goals
- Growth plans
Step 4: Develop Carrier Relationships
Insurance products − independent agents desire access.
Depending on the market and rules, this may mean securing appointments with insurance carriers or utilizing approved networks and platforms.
By having strong carrier relationships, agents will have more products available at their disposal, and in turn be able to find the right fit for potential clients.
Step 5: Setting in Place the Proper Tools
Technology can greatly simplify the work that agencies do on a daily basis.
Customer relationship management software, such as an agency management system, along with secure communication platforms, accounting software, and even digital document systems can help streamline information you have to track from different departments.
Invest in tools according to true business requirements instead of buying every tool available.
Step 6: Start Building Trust
An independent agency will grow through relationship building.
Clients want an agent who listens and explains coverage, answers questions, and is there after the sale.
This referral can be a very significant lead for new business when the existing customers are satisfied with the service.
Independence Requires Preparation
Becoming an independent insurance agent isn’t just about getting a license. You are creating a business, all while building your career.
Get the right licenses, pick a niche, build solid carrier relations, and set systems in place that help to onboard clients efficiently. With proper care and follow-through of the service provided an independent insurance agency can become a stable enterprise with capacity for future − long term growth.
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