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The insurance business it not the one it used to be, of course there remains potential but you have to weigh your options too. While there is a need for the different types of insurance from life to health and others there is increased competition and the commissions are no longer as handsome as they used to be.
Kimberly from Dallas Texas
I am having a hard time after losing my agency job of 12 years. I worked on commission only and at a drop of a dime, they terminated my contract. I believe it was a money grab. I was number 1 in sales this year and didn't even get a chance to enjoy it!
I'm a health insurance agent and keep getting calls from recruiters looking for me to join this agency or that agency. I hate to sign another contract (they all have them) and then have something like this happen again. I'm trying to partner with p/c professionals and financial planners so I can write and service these policies on my own. I did anyway when I worked for an agency. So, I'm conflicted. Do I sell out again or give it a shot?
I made very good money, (well over $100K) and it will take forever to get there again with the split these corporate agencies provide (normally 30% or less) and they own your book. However, it is nice to get referrals from the built in P/C producers.
All i can say is, if you are under 35, at least try to go out on your own if you are doing health or life. It's tough being 47 and having to start all over. I did not know any better when I signed that contract in 1998.
Just do it. Do it well and to perfection.
I wouldn't recommend getting into the insurance agency unless you have quite a bit of money saved up just in case it doesn't go to well. I would recommend the financial planning though as they are usually in high need.
I would not start an Independent Insurance Agency unless you had some kind of experience, there is too much as risk and too much to know before you invest your money in what some may think is a simple business to start. Without product knowledge, you risk facing legal action because of mistakes you may make, also yes there is E&O Insurance to protect you, but most carriers that write this will decline writing this coverage for those without experience. The ones that will probably have a high premium and not be able to offer you the best terms, this means you may make an error that won't be covered by such policy.
Having said that, there are a ton of opportunities to gain experience. Examples of this is to become a product for an Insurance Agency, another example would be to start an agency with a direct writer such as Farmers, State Farm or Allstate. While they do take those who don't have experience, they will train and mentor you.
One last food for thought on this, starting an independent agency is not being an employee and collecting commissions if not a paycheck, it's running a business. That means some serious expenses as well as having reserves for at least 3 years until you build you agency. You must invest to grow and while the expenses may not be as significant as other businesses, there will be money you will need to spend in order to start doing business.
To help you better understand what is involved in starting an agency, I wrote a guide to starting an insurance agency, you can find this guide at:
It's really a good idea but lot of risks are involved in this business after all it comes to relate to finance industry which update daily for its values.
Hi Cojoe,
The insurance business can be a fun and lucrative career choice. I began as a commercial agent about 20 years ago, and bought out my dad around 2002. My best advice is to pick a niche to focus in. I see so many agents trying to be all things to all people. If you have a specialty, it's my opinion that you can do much better. Our specialty is truck insurance and from those customers needs we also started a second specialty which is contractors. We have become experts in this field and are trusted advisors because of our expertise and integrity. Do you have an interest in some type of business? Why not become an expert in that type of insurance and market your agency to those types of businesses. While you are building up your niche book of business, you can also write the personal lines for these commercial customers if you'd like. But being an expert can help alleviate the problem of people leaving you ONLY for a lower price elsewhere. Give VALUE to your customers that they can't get anywhere else, and they will stay with you for years to come. Good luck!
Good job guys,
Interesting business but the risks involved should be looked into.
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Owning an Insurance Agency can be a lucrative career for the right person, you must be willing to invest in your agency as well as have the drive to sell insurance. It's not going to happen with the flip of a light switch. I wrote a 9 page guide about Starting an Insurance Agency, you can find it this guide by going to:
Guide to Starting an Insurance Agency
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