This article is specially prepared for those whose long time dream has been to build an Insurance agency but don’t know how. The technical know how will be revealed as you read further. But before diving straight into the strategies to adopt to build a successful Insurance agency, it is important to know what it means and why they exist.
What is an Insurance Agency?
An insurance agency is a company that is comprised of authorized insurance brokers who sell the company’s policies. Simply put, the insurance agency is a company that offers insurance for the individual and businesses. They are established to ensure the protection of financial security of assets and the protection from unforeseen risks liable to raise its head at anytime.
If not for insurance companies, many small businesses would have had stunted growth and even collapsed. In addition to this, many employees might have passed on during unforeseen ill health conditions. What about expensive court cases and settlements that would have rendered the business owner useless or even crippled the business if there were no insurance companies to provide protection?
The whole essence an agency cannot be downplayed or relegated to the background. Listed are some major roles the insurance agencies play:
Major Roles of an Agency
- Handling Claims Accordingly
- Collective Risks
- Economic Growth
- Insurance Regulatory Authority
- Liaising between insurers and Client
- Life Insurance
- Assessing Risk
- Provide safety and Security
- Collecting Premiums
- Processing all insurance policy requests and so on.
Building a Successful Insurance Agency
Now that you know all that the insurance agency entails, that is, its major functions, it is safe to adopt strategies for building a successful Insurance agency. In this segment of the article, we will be discussing 5 strategies .
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Write a Business Plan
Building s successful Insurance company requires that you write a business plan. An insurance agency business plan will be your guide from beginning till the end. It will be the document that will help you stay committed to your clients and employees. Also, it helps you achieve goals you have set, prevent you from trial and errors, identify impending risks and satisfy financial needs and resources.
This business plan can be updated as time goes on and will serve as a guide from the moment you have launched your insurance agency.
A proper business plan consists of:
- An introduction of all involved in the project and the individual responsible for executing the plan.
- Explain the strategies you will adopt in getting prospective clients and the insurance products you intend to sell and services that will be rendered.
- It is very important to identify who your target market is so you could spot all your competitors.
- Explain your strategy to standout from your competitors. That is, what makes you different from them.
- You should analyse all your risks
- State out your budget and also how you will be getting funds to run the insurance agency.
The business plan is the first step to starting a business. It helps you get financing for the start-up.
In addition to what the business plan entails, picking a suitable location for the insurance company is also paramount.
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Certifications and Accreditations
Of course, you wouldn’t want to embark on the journey of building an insurance agency without proper certifications and accreditations. In a case whereby you weren’t an insurance broker but decided to change career due to believing the insurance industry is a profitable one, there are trainings you must need to undergo in order to familiarise yourself with the industry. After proving your self worthy in some exams, it is then that you will be certified.
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Choose a Legal Structure
There are different Legal structures which include:
- Sole proprietorship
- Corporation
- S Corporation
- Limited Liability company and
- Partnership
It should be noted that the structure you choose to model your insurance agency upon determines the amount of personal Liability you take on. Although, each structure has its own advantages and demerit.
The Sole proprietorship is the easiest structure but it comes with the greatest personal Liability compared to other structures. If you choose such structure when building your insurance agency, it suggests that in a situation whereby you need to pay business debts, you would have to use your personal assets.
Also, in a case where you are being sued, your personal assets face the risk of forfeiture. Therefore, you must think this aspect of structure carefully before making your decision
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Come up with a unique name for your insurance agency and ensure that you register it.
Be creative in choosing a name that conveys the message your insurance agency stands for. You could easily search for names to confirm if they haven’t been picked and registered already.
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Get a Tax Identification Number (TIN)
It is a crime to evade taxes, therefore, you should plan to start paying your taxes as soon as you get your TIN and start the operation of your insurance agency.
There are numerous strategies that can be adopted in building a successful Insurance company but the most important ones are the 5 listed and explained above.