Starting an Auto Insurance Company
Looking for the BEST Exam Prep course available to pass your insurance license exam?
You may not think it, but insurance is an industry well-suited to new small business entrepreneurs. Becoming an insurance agent is a key to a comfortable income in an industry that customers will always need, even in the deepest of recessions.
According to the Bureau of Labor Statistics, the median pay for an insurance agent is around $48,000, and jobs in the field are expected to grow by 10 percent over the next decade. Owners of insurance agencies can expect to earn even more.
That’s not to say that there isn’t risk involved in starting your own insurance agent business. Most small businesses fold within three years of establishment, and insurance companies are no exception. Taking the right early steps to becoming an insurance agent will improve your odds of succeeding in a promising, but competitive industry.
Your first step to becoming an insurance agent should be getting licensed. Insurance licensing requirements vary from state to state, but in most instances you’ll need a property and casualty license, and a life, health, or variable annuity license if you intend to sell those products.
When starting your own company, initial financing is important. You can obtain a business loan from traditional lenders like banks, or find a business lender to help you get up and running. To improve your chances of getting a loan, be sure to have a well-written business plan detailing how you intend to run your business and how soon it will be profitable. Industry experts say that it takes about $20,000 in seed money to start an insurance agency. That money helps with initial office space, technology, and other related costs.
After getting licensed, you’ll need to think hard about what types of insurance you’ll want to sell. Most agencies carry several types of insurance but specialize in one particular area of insurance. For example, a firm might specialize in auto insurance, but still carry life and home insurance.
A key decision insurance agency owners have to make is whether to own their own agency or buy a franchise. Buying a franchise will lend a new entrepreneur the cachet of an established brand and some professional support. The trade-off is that you will likely only be able to sell certain products and will have to meet other standards set by the franchise owner. Independent insurance agents set their own rules, but do not get the mentoring and support a franchise can provide.
Once you’ve received your licensed, obtained financing, set up an office, and decided what type of insurance you want to sell, you’ll need to recruit customers. Identifying key markets and the products you’ll want to sell them is something you’ll need to do early on while you’re creating your business plan.
By carefully planning your entry into the insurance market and mastering all the skills needed to become an insurance agent, you can start your career from a position of strength. Entrepreneurship is highly challenging, but it’s also highly rewarding in terms of financial success and personal satisfaction.
Summary
Becoming an insurance agent can be a rewarding career. Before opening an insurance agency, entrepreneurs should carefully plan their entry into this competitive career field.
Company Bio
America’s Professor (https://americasprofessor.com/) helps aspiring insurance professionals learn the skills they need to pass insurance licensing examinations in 26 states. America’s Professor provides courses in life, accident and health, sickness, disability, property and casualty, and personal lines insurance, and for every insurance licensing course clients take, they may earn up to three transferrable credits from the University of Montana.
 |
 |
| Insurance Licensing Courses | Insurance Practice Exams |
Sources
http://www.iabforme.com/resource_center/agency_management/start_ups/
http://smallbusiness.chron.com/start-own-insurance-company-2402.html
Hello,
I don’t want to be an insurance agent. But I want to start my own insurance company like Geico/Statefarm/Allstate. What are the guidelines for that. Can someone help me. Thanks
Raja
Hi Raja, You will want to get your insurance producer licenses and then look into an agency license or possibly purchasing an agency from someone who’s selling (usually retiring). You may want to get in touch with a few of those different companies and see if there’s anything available in your area. Good luck!