Being an independent insurance agent has some great advantages, but it also takes a thick skin and the ability to face rejection from client leads. Essentially, all agents are salesmen who must build contact lists as well as maintain a loyal clientele. But what is it really like on the inside?
Qualifications and Compensation
While a formal education is not as important as the right job candidate (confident, disciplined and hardworking), it’s helpful to earn a bachelor’s degree in finance, business, economics, accounting, marketing or another related field. However, with or without a degree, you will need to pass a licensing exam administered in the state you wish to work in, which generally requires pre-exam coursework as well. In addition, most states will require agents to take continuing education courses every two years to maintain their licenses.
Independent insurance agents rely heavily on commissions during their first year, in which they receive up to 20 percent of health, auto and homeowners insurance premiums and up to 90 percent of life insurance premiums for policies sold to new customers. For each year a client renews a policy, agents receive up to 10 percent of the policy premium. What does this mean? A successful independent insurance agent can easily earn a generous, triple-digit salary.
Marketing and Running an Agency
Independent insurance agents must develop and execute marketing strategies to bring in new customer leads and brand the agency. Everything from business cards to brochures to a website must be carefully planned and coordinated. Whether this work is performed in-house or outsourced, the agency budget must account for these expenses.
An independent insurance agency must also maintain records, process contracts and paperwork, answer the phones, help policyholders settle claims and stay current on changes to tax laws, government benefit programs and any other regulations that affect the office or the agency’s clients.
Joining an Agency
Some independent insurance agents enjoy working alone and supporting their own agency. However, others prefer to join established independent agencies, in which commissions are paid to the agency (which uses a percentage for administrative costs) and then distributed to the agents. Additional perks of joining an agency are mentoring/training programs, sharing knowledge and expertise, divvying up the workload and company benefits.