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Tips For Starting Your Own Insurance Agency

January 6, 2021   |   by Staff Writer
starting insurance business

Starting Your Own Insurance Agency

When you are beginning in the world of health insurance sales, you may feel a little lost on where exactly you fit. Figuring out what market niche and the service area that you and your agency will cover is vital in being successful. Do you want to sell to individuals? Do you want to focus of seniors (and sell Medicare Advantage, Medicare Supplement, and Long Term Care products? Or, do you want to sell employee benefits to employers (and their workers)? The choice is yours – and each niche offers you opportunity.

It is also important to consider that certain states allow for different license types, so you will want to be sure to do the research prior to over-committing to focus on a market niche about which you feel passionate. For information about California insurance agent and broker licensing, visit the California Department of Insurance website. For information on licensing in Nevada, visit the state Division of Insurance web page.

Choosing Your Insurance Product Offering

Piggybacking off your product and service research, you will want to learn as much as you can about what is offered by the insurance carriers, administrators, and exchanges in which you are most interested. Can you get what you need from a single carrier, one or two carriers, or do you need to contract with a range of firms? Have you considered whether aligning yourself with a general agent will benefit you – and your clients? The right general agency partnership can often offer you a range of carriers, products, and services – plus administrative and sales support that can relieve you of some time-consuming tasks. Taking the time to learn about what’s available can help you be more successful in the long term.

Picking Your Path As an Agent

Another big consideration is whether or not you choose a path of independence or become an employee of a larger agency or financial firm that sells insurance. This truly depends on how much you are ready to take on in your life, as well as what other sales or marketing experience you have in your background. If you decide to take the independent route, another crucial part in beginning your business is to break down exactly what kind of structure you wish to have within your business, i.e., LLC, incorporation, DBA, etc.

Setting Up Home Base

Just like you finding your market niche is important, selecting your office location is an important decision in setting yourself up for success. Look at your target area. Research your potential competitors. Will you have “major name” competition – like agents who represent State Farm and Allstate? What about independent brokers who represent the same companies that you’re considering – like Anthem, Kaiser Permanente, or others? Or, is your target area without any nearby competition?

Although some regions are still in quarantine, you will want to consider what things will be like when face-to-face meetings are again the norm. If your focus is Individual & Family Plan (IFP), Medicare Advantage, or Medicare Supplement sales, an office where you can see clients may be vital.

If you’re focused on group/employee benefits sales, where you will be calling on clients in their offices, having a “real office” may be desirable but not required. It’s up to you and what you want to commit to as far as monthly expenses. Some very successful brokers do business from a home office and don’t have a rented or owned space; others find it advantageous to operate with a storefront (or suite-front, if you will), which can lend you increased credibility or even prestige. Don’t forget, though, that having an office may require additional outlay of cash for business permits, technology investments (like a phone system, internet, etc.) to stay in compliance and help you stay connected with clients.

Remember Success is Within Reach

Starting your own business can feel scary, but it can also be very rewarding. For additional guidance on getting started, visit the “Start Your Own Business” page on the USA.gov website.

 

 

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