Starting an insurance agency doesn’t happen overnight. It is not a simple task, but it is well worth the effort. With some equity and determination, you can turn your dream of starting an insurance agency into a reality.
Here is a simple five-step guide on how to get started.
Step 1: Do Your Research
The first step is to do your research. You need to ensure that you know what you are getting yourself into, both in terms of setting up and running an insurance agency.
How Hard Is It To Start An Insurance Agency?
Starting an insurance agency is not easy, but it does not have to be difficult either. It’s important to research your options and understand how you want to start.
For example, you have options such as opening a branch of an insurance agency that makes starting an insurance agency much more straightforward.
Step 2: Understand The Finances
The next step is to understand the finances. Working in insurance can be lucrative when done well. However, you need to start by establishing your financial goal and how you can make it happen with an insurance agency.
Is an Insurance Agency Profitable?
Insurance agencies have varying profit margins based on how they operate. Everything from sales and marketing to risk management affects an insurance agency’s profits.
If we take Progressive Insurance as an example, it has a market cap of $56.7 billion (August 2021). Its net profit margin is 11.95% (June 2021).
At Compass Insurance Agency, our branches have an average net profit of 40%.
How Do Insurance Agency Owners Make Money?
Insurance brokers (who sell insurance from these companies) make a profit by earning a commission on each sale. This encompasses renewals as well as new policies, bonuses, and incentives.
How Much Money Does An Insurance Agency Owner Make?
According to Indeed.com, an insurance agency owner’s average salary is $124,259.
Step 3: Understand The Job
The third step in how to start an insurance agency is understanding what the job entails. There are differences between insurance branch owners, agency owners, and franchise owners. Each requires a different amount of work, initial investment, and time to start.
What Is An Insurance Branch Owner?
An insurance branch owner is someone who owns a single branch of an insurance agency.
Insurance Branch Owner vs. Insurance Agency Owner
There is a clear difference between an insurance agency owner vs. an insurance branch owner. An agency owner owns their own independent insurance agency – not a franchise operation – whereas a branch owner owns a branch of a franchise.
Insurance Branch Owner vs. Insurance Franchise Owner
Is a branch owner different from a franchise owner? Short answer: Yes
The key difference between a branch owner vs franchise owner is that the franchise owner owns the overall operation that branch owners work under. A franchise owner owns an insurance agency that then has branches (run by branch owners) under its franchise.
Step 4: Decide on a Location
The next step is knowing where to start your career as an insurance branch owner. Different states have different successes when it comes to insurance. It’s always a good idea to understand what is required of you by the state to start a business or franchise branch before you commit to starting your insurance agency there.
Some of the top states for starting an insurance agency include:
- New Hampshire
Step 5: Picking an Insurance Agency
When you decide to become an insurance branch owner, you then have to decide which franchise you want to be a part of.
The Best Agency to Buy an Insurance Branch From in 2023
When you come to Compass Insurance Agency to start your insurance branch, you will be picking the best option.
We offer a low-risk, high-reward business with all the tools you need to be successful. Unlike franchises, there are no expensive franchise fees.
Own a Business for Under $50,000
One of the great things about Compass Insurance Agency is its low start-up costs. You can own your own business for under $50K, which means you don’t have to mortgage your life away to get started. Plus, you’ll earn profits much faster than with a franchise opportunity.
You don’t need to know everything about insurance before you start a branch with Compass. We provide you with full training and access to a resource portal that provides live and learner lead training.
You will receive training on topics such as:
- Sales tactics
- Carrier website navigation
- Product knowledge
The portal also provides training for those who already have experience in the industry so you can continue to learn and scale up your business.
Not only do we provide training, but we also provide support. We assist with everything from marketing to agent recruiting. You’ll never be alone when you become a Compass Insurance Agency.