Tips on starting your own insurance company

Insurance company

If you want to start a small business (insurace company) that provides an ongoing revenue stream for years to come, an insurance agency is an ideal opportunity, as clients repurchase products to ensure that coverage continues. 

Types of insurance companies

Insurance company or agency can sell the following tpes of insurance products: life, annuity products, term and whole health, automobile, homeowners, property, causality, and disability. 

If you have decided to open an insurance company, there are some preparatory steps you need to follow: 

First of all, you will need to decide on a specialization. As many insurance companies do no want limit themselves to specific products and carry a variety of insurance plans and sell many types of insurance like health, life, automobile, flood and homeowner’s insurance, the good idea might be to specialize in all areas.

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If you feel this is too broad for you, you might consider specializing in one particular product while still offering other insurance plans.

How to sell insurance 

Before you’re eligible to sell insurance, you need to successfully pass several state examinations that test your knowledge of various insurance types and plans. You can receive an insurance license after you have passed the tests.

Have in mind that laws and identifiers differ by state. In general you will need a Property and Casualty Insurance license and/or a Life, Health and Variable Annuity license. 

Note that new insurance agents aren’t eligible for their own agency as you will need to gain approximately five years of working experience. You can either work  for an insurance company, or become an independent contractor for an insurance company and work from home and set your own hours.

Corporate insurance licence

Once you become eligible to start your own insurance company, you’ll need to obtain a corporate insurance license as it allows you to sell insurance products under your company’s name. 

As you might be aware, starting an insurance company is not cheap. Compile a list of all start-ups and hire an accountant or business plan writer. Have them write a business plan for you to apply for a small business loan. 

You can also buy a franchise and work as an independent agent for a well-known insurance company. Some franchises offer private financing.

The advantages of buying a franchise is operating under a well established name and having access to “in-house” financing but you don’t have a freedom to choose a product you will sell.

Once you’ve secured a business loan, it’s time to find a location suitable for your office. It’s best to choose a small location at the beginning that is perhaps within a busy shopping district or near a major intersection. It should have a well maintained exterior and interior. It should provide enough space for a reception area, one or two offices and a conference room for initial client consultations and workshops for potential clients.
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