Starting an Independent Insurance Agency


Starting an independent insurance agency can seem like a daunting task.  Where do I begin?  How do I get licensed, find insurance companies to represent, open an office, and hire people?  While there are many challenges that will face you there are also many rewards that await as an agency owner in the independent agency system, such as the ability to call your own shots, a healthy return on investment in the form of owner’s equity, and the satisfaction of being in a business that protects people and their valuables.  

We are excited that you are considering opening your own agency, but there are some critical factors that are necessary for success. It's important that you have given these careful consideration before you begin to to invest your time and resources into opening a start-up agency.

Capital – While an independent agency is not capital intensive relative to other industries, you will need start-up capital for things such as office space, furniture, computer equipment, Errors and Omissions Insurance and marketing.  It will also take some time to build your business so you will need money for living expenses as you grow your agency.
 
Access to Insurance Companies – You can get your license, but you can’t sell insurance as an independent agency without access to insurance companies.   For property and casualty insurance, most companies are looking for a long-term relationship and a commitment to a minimum amount of production, especially the first year that they appoint you as their agent. Getting an appointment also requires a track record of successful marketing and selling, a marketing territory geographically desirable to the company, and a solid proposed business model.
 
Good Sales and Administrative Skills – Some people have great selling skills and can make great insurance producers.  Other people are great at administration and service.  Starting an agency from scratch will require both sets of skills until you are large enough to hire other staff.
 
Thorough Technical Expertise – Customers are placing their risk management needs in your hands, therefore you need to understand the products you are selling. Depending on the type of insurance you intend to offer, there are many different policy forms and coverage implications. Your pre-licensing course only gives you a rudimentary knowledge of insurance coverages.  You will need to actively seek out Continuing Education classes to help you expand your knowledge.



Ready to Get Started?

If you are still ready to begin this journey, IIANC offers a couple of resources to help equip entrepreneurs with the knowledge and tools to open and operate an independent insurance agency.

The Agency Activate program is a step-by-step video guide to help you navigate the critical first steps of starting your agency. Helpful planning documents and worksheets are also included.  The videos are set up as separate modules that you can watch (and revisit) at your own pace. We strongly encourage start up agencies to invest in the Agency Activate program to put you on a path to success. The investment now of a few hundred dollars will pay off greatly in the long run. With Agency Activate, you will be given the tools and knowledge to create an agency that is customized to leverage your unique skills and interest for maximum success. Activate your agency in less time while minimizing costly mistakes and expenses.  

I can't say enough great things about the Agency Activate program!  It provided some very good, sound information about things that a business owner will need to consider as well as practical examples on how to apply those to your agency.  I loved the short, concise videos that were broken out under each section. I appreciated that the program covered all options of starting an agency – whether from scratch, purchasing an existing book or even working with another agency until you’re able to get your own appointments. Overall, I found the Agency Activate training to be very rewarding and beneficial.  It helped me to really take a closer look at my business and develop a framework in which to operate from for success.  I would definitely recommend Agency Activate to anyone that is looking to start their own agency. The knowledge that was shared was invaluable to me!

 - Deirdre Rushin, Imperial Insurance & Financial Solutions

For those looking for a more "DIY" route, we have put together a 10 Steps to Starting an Agency Guide, which covers the basic things you will need to consider and do when to open an independent insurance agency. Important resources are included as well.