The insurance industry is easily one of the most profitable in the world. Worth over $900 billion, it’s a very lucrative business to get into. If you’re thinking of starting your own insurance business, there are, however, certain things that you must consider before you begin operations and kickstart your new career.
To help guide you in the right direction, here are the top 5 things you should keep in mind:
1) What Type of Insurance You’ll Sell
At the start of the process, think about the type of insurance that you want to sell. Do you want to specialize in health insurance, sell car insurance or perhaps life insurance? Those are three of the most common routes to take. However, the type of insurance you settle on will depend on your personal preference and where your experience lies.
Alternatively, you could offer a variety of different types – as long as you have the resources and expertise to do so of course.
2) Your Start-Up Costs
Just with every business venture, you need to consider what your start-up costs will be from the get-go. For your insurance business, you’ll require an office premise, experienced staff, a Book of Business and equipment in order to acquire clients.
To ensure that you’re on the right path, you could take a look at your competitors and the ways in which you can stand out from them from the start – and include any of the extra costs required to do this within your budget.
3) What Licenses You’ll Need
To operate as an insurance agency there are particular licenses that you’ll require. This will guarantee that you’re able to sell insurance in various states. The first step to acquiring a license is to pass a general insurance education course, along with an ethics course.
Some states also require different licenses depending on the type of insurance that you’re selling along with a Series 6 license (if you’re selling life insurance).
4) What Insurance You Require
In order to sell insurance to clients, your business itself will need insurance along with a business owner policy (also known as BOP) and E&O insurance. This will ensure that not only your equipment is protected, but the business is safeguarded from any omissions and errors.
You will also have to secure a surety bond before starting operations. This guarantees that a party is paid if you fail to meet a deadline. A must in every state, it’s an extra level of protection that will undoubtedly come in handy.
5) The Type of Software You Integrate
Nowadays, many insurance businesses opt to install software to help with their daily tasks. From agency management systems to underwriting platforms (such as that offered by Chaucer & Artificial Labs), it can make your business more efficient and productive. It’s also incredibly useful for startups that might not yet have the experience and expertise required.
If you don’t have the initial capital for this type of software, you can always integrate it when you have the money to do so – it’s always worth keeping it in mind throughout the process.