Becoming an Independent Insurance Agent: What You Need to Know

In today’s insurance industry, an increasing number of insurance companies are relying upon independent agents to reach potential policyholders. Because of this, more and more insurance professionals are discovering the benefits of setting themselves up as independent agents.

By acting as independent insurance agents, they have the opportunity to work with a large number of insurance companies. This can be especially advantageous to consumers, because independent agents typically have immediate access to a wide range of quotes from different providers.

To become an independent agent, it’s essential to have a thorough knowledge of the nationwide insurance market. Likewise, it’s also crucial to keep abreast of the constant changes in regional insurance regulations.

Insurance agents are required to register and get proper licensing. Every state has different regulations, so it’s important to contact your state’s department of insurance to find out about necessary licensing and documentation.

The First Hurdle: Getting In

Many established insurance companies aren’t particularly enthusiastic about partnering with a new, inexperienced independent agent. Because of this, agents with at least five years of experience working as an independent agent for a company like Connect Insurance, have a decided advantage over those who are new to the industry. The Independent Insurance Agents & Brokers of America, however, offers a list of companies in each state that are willing to work with newly-licensed independent agents.

Additionally, it helps to compile a list of at least 300 promising client prospects. This list can help get a new agent’s foot in the door when approaching one of the big insurance companies.

As a rule of thumb, many independent insurance agents work with as many as 13 property/casualty companies, in addition to at least six health/life insurance providers.

How to Beat the Competition

Starting an independent insurance agency can cost as little as $5,000 and as much as $40,000, depending on where you locate your office and whether you add extra staff. Marketing is key, but if you’re on a budget you can save money on marketing by using effective word-of-mouth techniques to bring in referrals.

To meet potential clients, join your local chamber of commerce and volunteer for charity events. Also, print and distribute handy wallet cards with local numbers for utilities, emergency services and hospitals, and add your contact information on the bottom; these are cards that people tend to keep. You can also distribute inexpensive logo items such as key chains and coasters.

It’s also essential to maintain an active website and keep a highly visible Internet presence, whether through social networking or through Internet advertising.