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How to become an Independent Insurance Agent

An independent insurance agent operates as a go-between for you and a number of different insurance companies. Independent insurance agents have existed since the early to mid-1800s, and in 1896, the Independent Insurance Agents & Brokers of America, Inc, a trade association, was founded. In the United States today, there are around 36,000 independent insurance agencies. Continue reading to learn how to become a self-employed insurance agent.

What’s the role of an Independent Insurance Agent?

Independent agents are usually self-employed, offering insurance from different companies. They may be needed to complete company-specific training or apply for and be approved to sell the insurance of the company. Typically, the agent must demonstrate that they have a strong customer funnel and are a good fit for sales. Other independent agents provide carrier access and administrative help to insurance membership networks or wholesalers.

The job of an independent agent is to source suitable insurance packages for you through numerous insurance companies whenever you ask for a quote. A smart agent will show you side-by-side pricing and coverage alternatives so you can weigh the advantages and disadvantages of different insurers.

Independent agents may also have access to carriers that the common shopper does not have access to through the internet. For example, the average consumer cannot obtain a price from Chubb insurance online and must call an agent.

The insurer pays the independent insurance agent a commission when you purchase your coverage. Regardless of the insurance company you choose, agent commissions are often comparable.

How can I become an independent insurance agent?

Becoming an independent insurance agent is a rewarding and non-discriminatory career option. While some states have different standards, the majority of them follow the same procedure. Future independent insurance agents should take the following six steps to get started in the field and set themselves up for a long and successful career:

Make an effort to educate oneself.

To work as an independent insurance agent, you’ll need a GED or a high school diploma. In the long run, a bachelor’s degree in finance, marketing, or business administration may help you progress your profession. Some colleges even offer an insurance major.

Each state requires future agents to pass an exam in order to apply for an independent insurance agent’s license. Before taking the exam, applicants should complete a study course that includes both the test subject and non-test insurance topics. Some insurance companies also offer on-the-job training with a licensed insurance agent so that the applicant can get practical experience.

The exam’s particular criteria differ by state, with some requiring applicants to complete a training program before taking the exam and others having none. Contact the licensing authorities in your jurisdiction for further information on your state’s license requirements.

Exams for licensure should be taken.

Taking the licensure exam is merely the first step toward earning a license. People who want to work as independent insurance agents should not have any criminal convictions on their background. In some states, applicants with minor criminal backgrounds, such as traffic tickets and other non-violent offenses, may be granted. It’s a good idea to check with your state’s licensing board to discover what expectations and requirements they have. You must also pass a background check, which is a frequent requirement of state licensing boards. Many keep a record of applicants’ fingerprints as well. These regulations are designed to prevent deception and fraud.

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Obtain a license.

After completing their insurance exam and submitting their information to the licensing board, a candidate can apply for and obtain a license to sell insurance products. On rare occasions, an applicant may be required to apply for a license to sell each specific type of insurance product, but this is unusual.

Look for work.

As a new independent insurance agent, getting clients may be difficult, but not impossible. Family, friends, and former employees could all be approached. By providing good service, agents build a positive reputation, which expands their opportunities. An insurance firm or an established insurance broker may offer new independent insurance agents on-the-job training and a position.

Advertise

New agents must market themselves to both insurance companies and potential clients. Despite the fact that online advertising is less expensive than local advertising, both must be covered in order to reach the greatest number of clients. New independent insurance brokers may want to inquire for references and suggestions in order to reach out to more potential customers. Referrals from friends and family are vital when you’re just starting out.

Continue to learn.

To provide the greatest service to their customers, independent insurance brokers must keep up with changes in legislation and the industry. Independent insurance brokers can enhance their professions by participating in continuing education activities such as completing courses and attending seminars and presentations. Most states include a need for continuing education as part of their insurance agent requirements.

Make certain you’re covered.

Independent insurance agents benefit from general liability, workers’ compensation, and errors and omissions insurance. A startup company’s financial risk can be mitigated by insuring it. The policy on mistakes and omissions is very important. This policy was created to safeguard independent insurance agents and persons in similar professions against client claims arising from mistakes made by the agent or their staff that result in the client being uninsured.

Advantages of Working as an Independent Insurance Agent

More alternatives for convenient shopping:

Independent insurance brokers may sell a range of coverages (health, car, RV, business) from many different insurers, which helps speed your shopping process without the need to obtain several quotations via websites or phone representatives.

An independent agent is often a resident or a local business in your community, so they are familiar with the area and potential hazards. You should be able to keep your agent for the rest of your life. If you want to support a local business, an independent agent is a wonderful option.

Individualized service:

An independent agent will expect to speak with you about your unique requirements and living situation. As a result, they may be better able to locate discounts or better coverage that is more tailored to your needs.

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Good for complex insurance needs:

If you have a DUI on your record, numerous houses in different states, a small business, or high-net-worth assets, an independent agent may be able to find you coverage more effectively than you would on your own.

Cons

Some insurers are not available:

It happens that only businesses that are permitted to sell can be represented by independent agents. That said, since a number of insurance firms only sell through employees or agents, an independent agent therefore may not be able to provide you with options from available insurers. An independent agent, for example, may not be able to sell you insurance from State Farm, USAA, or Amica, as well as online insurance companies like Lemonade.

It’s possible that you won’t be able to get coverage right away:

If you need coverage right away—say, in the next 10 minutes—and don’t have time to have an agent-customer interaction, identify your coverage needs, and wait for the agent to study your possibilities, an independent agent may not be a good fit.

As an independent insurance agent, how much can I expect to make?

According to the US Bureau of Labor Statistics, the average insurance agent’s total income (salary, commission, and incentives) in 2013 was $48,210, with the lowest 10% earning $26,120 and the most 10% earning $116,940.

How much will insurance agents make in 2022/2023? The average annual pay in this industry is $50,600. This, on the other hand, is contingent on a lot of factors, and you must first decide which type of agent you want to be.

There are two types of insurance agents in the United States: captive and independent. Single insurance corporations, such as State Farm, employ captive agents.

Independent agents, on the other hand, are self-employed. There are differences in how these agents function and how they are compensated.

Educational Requirements

Bachelor’s Degrees

Risk Management and Insurance can be studied as a B.S. or a B.B.A. at the undergraduate level. In themes like property and casualty insurance, health and life insurance, insurance firm operations, and risk management, these programs integrate basic education requirements with core business education and industry-specific coursework. Some programs include internships, and others are available entirely online.

Master’s Degrees

Students can receive a Master of Science (M.S.) in insurance and/or risk management at the master’s degree level, or they can choose one of these areas as a concentration within a larger Master of Business Administration (MBA) program. In most cases, these programs can be finished in two years or less. It’s worth noting that some M.S. programs are only open to seasoned professionals who have already earned the Chartered Property Casualty Underwriter (CPCU) designation.

Ph.D Programs

Doctoral programs in insurance and risk management are uncommon, however several schools offer them. Students begin by studying advanced risk management, economics, and financial theory courses before concentrating on PhD research with a faculty member with whom they have an intellectual interest. These programs normally take four years to complete and culminate in a dissertation and defense.

Certificate Programs for Graduate Students

Graduate certificate programs in insurance and risk management often consist of a brief sequence of courses in advanced business areas. Some programs are tailored to people with prior industry experience who desire to better their careers. Some colleges offer credits that can be used toward the Certified Risk Manager (CRM) or Certified Insurance Counselor (CIC) designations.

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Many universities in the United States offer traditional and online undergraduate and graduate programs in insurance and risk management. Internships and other forms of hands-on learning are frequently included to help students develop real-world skills that will help them succeed in the profession.

Why should you pursue a profession in insurance?

Ability to work and study.

Consider the usual paradigm of third-level study in a new light; it doesn’t make much sense. Three years of all-night cramming sessions, as well as financial difficulties, resulted in a mountain of debt and few possibilities upon graduation. A Master’s degree can help you avoid difficult job decisions, but you’ll eventually have to face the fact that you’re highly qualified but inexperienced in a very competitive labor market. Working as part of your studies as part of The Insurance Institute’s Insurance Practitioner Apprenticeship program means you’ll be ready to hit the ground running in the business. It also means you can have a job and make plans while your classmates are scrounging for beer money at the back of the sofa.

There are numerous possibilities.

Insurance is one of Ireland’s businesses with a serious skills deficit, which is why the Insurance Practitioner Apprenticeship program was created. Its goal is to attract new talent to the industry and ensure its long-term viability. As a result, there are numerous career opportunities in a rapidly expanding business. With Brexit on the horizon and some of the world’s largest insurance companies considering relocating to Ireland, the sector could be opening up to a whole new set of opportunities.

Insurance will always be needed.

Insurance is a given – it’s all around us. It will always be required. There will always be risk, and there will always be a need to mitigate that risk, thus insurance professionals will always be in need. It’s no coincidence that international insurance businesses are so successful; they sell a product that is in great demand and will continue to be so.

A thriving industry

You may have the impression that insurance is a stodgy, bureaucratic sector, but you’d be mistaken. In fact, insurance is a dynamic industry that values creativity and the development of new ideas and products. Technology and innovation are now at the forefront of the industry, and there is plenty of potential for young individuals with a “can-do” attitude to disrupt the status quo.

Good salary and Perks

Insurance is a fantastic industry with lots of perks, as such you should expect excellent compensation. The Insurance industry also offers security, and it is special in the sense that it can provide amazing benefits to existing employees. Insurance and pension benefits are important considerations in any profession, but no one can provide better insurance than insurers. You’ll be glad you’re in insurance if you ever want to establish a family.