The insurance agency business is one of those firms that are widely undisturbed by the state of the economy of the Nation. The reason is that most insurance products and services are a very necessary part of human modern life.
You wouldn’t want to own a car without automobile insurance coverage, and even as your mortgage company may not necessarily demand that you have any homeowners insurance, you wouldn’t want to leave the only single biggest investment you have acquired in your life unprotected.
In several other ways, the insurance business is not different from any of the other business opportunities. But then, it comes with its own unique and peculiar considerations. Firstly is the process of licensing. For you to sell insurance products anywhere in the US, you will have to first pass the state exam for licensing.
Steps in Starting up an Insurance Agency Business
1. Get to Understand the Industry
Been an agent or a broker selling any insurance policies and annuities, the company’s participants earn what is called commission as income, it is mostly as a percentage of the total premium of insurance policies that is been sold.
They earn fees as income as well for providing the risk management consultants and several other value-added services they also provide. The industry only consists of sole independent brokers and agents.
2. Make a Market Research and Feasibility Study
Many households in all the socioeconomic groups all over the US make use of the services of insurance agencies. This leads to industries being established and the revenues being distributed according to the regional population.
Most people maximize the insurance agencies industries that are closest to them, this is out of convenience. When an area is not served properly, firms tend to move into them and stake a claim in that market.
Likewise, firms tend to move into locations when the competition is very high and the profit margins begin to suffer at the moment.
3. Decide on the Niche to Focus Your Insurance Agency Business
The very idea of developing a niche on which to grow your own business book for the insurance agents is definitely not a new one. However, It is heard often from insurance agents and brokers who want to find a niche market but are not certain of where exactly to start.
4. Know who your Competitors are
The knowledge of who your competitors are will keep you on your feet always and this will cause you to keep improving on your knowledge and never be complacent.
How you package your products and policies will determine if you will be ahead of your competitors or not. You will have to conduct your economic analysis to know your stand in the industry as compared to others.
5. Know the Possible Threats you will Encounter
Selling insurance is very important but can be very challenging especially in a competitive industry that is changing rapidly the obstacles are much, it may include the industry legislations, the state of the economy, getting licensed, Health care reforms, and even the cost of starting up.
6. Choose a Suitable Legal Entity
Choose the legal entity that will be suitable for your business, it is based on the size and scale of the business. This is to prevent any perceived disadvantage.
7. Choose an Attractive Name
The name of your industry should be very catchy such that it can get the attention of people easily. Names have a way of drawing the interest of people towards a business and get to know what they offer.
8. Draw up Your Insurance Agency Business Plan
Finally, before you kick off your insurance agency business, you need to draw up a business plan. The importance of a business plan cannot be overemphasized as it not only shows potential investors what your dreams are for the business, but it also stands as a guide for the business.
Conclusion
To really become successful in the business of insurance there are several things that need to be put into consideration before embarking on such a mission.
Make sure you have all the necessary information needed, never hesitate to ask questions especially from those who are already in the business of insurance especially to know the best insurance policies to take. This is because to do an insurance agency business, you need insurance.
