How to Start an Insurance Company: 6 Tips Growing Your Business

 

Wondering how to secure your financial future, ensuring you always have more than enough? Want to be able to live comfortably while you work, when you retire, and still be able to leave an inheritance?

Starting a business is one of the best ways to do this. With so many options, it can seem overwhelming. 

But if you want to start a business with a clear path forward, eliminating much of the guesswork involved with entrepreneurship, you should start your own insurance company.

Want to know how to start an insurance company? It’s not as hard as many other types of businesses, and startup costs are much more manageable. 

Keep reading to learn how to open an insurance company this year so you can begin working for yourself and building your financial future.

1.Get Licensed 

All insurance agents need to be licensed in the state they operate in. Obtaining your license begins with mandatory coursework. Depending on the state you are getting licensed in, you may need between 20 and 40 hours of class hours. 

These courses will cover the general insurance industry and best practices when it comes to selling policies. You’ll also need to take classes on life insurance ethics before you can sign up to take the licensing exam. 

While you may be able to find in-person classes, most insurance licensing courses take place online. With online courses, you can work through them at your own pace. This makes it easy to pursue your license while you continue working your day job or finishing school.

Once ready for the test, be prepared to spend a few hundred dollars just to take the exam. It takes a few hours to complete, so ensure you are well prepared ahead of time, to avoid having to retake the exam.

If you plan to sell more than one type of policy, which you should, you’ll need separate licenses, which require separate courses and exams. You can build your portfolio of products up over time. You don’t need to offer them all right off the bat.

2.Save Up Startup Funds

Aside from the cost of courses and exams, you’re going to need additional startup funds when starting an insurance company. You can save a lot of money by starting your business from home, relying on the computer and phone rather than in-office consultations.

If you plan to open an office, you’ll need money for rent, a security deposit, and furnishings. You’ll also need software, a business phone, a website, and other virtual assets. 

If you plan to start small, you get can by with a few thousand dollars. Those looking to open an office in a metro area will be looking to save up tens of thousands of dollars.

Do your best to create a budget and limit your expenses in the months leading up to your starting date. You can also spend a few hours per day working in the gig economy, such as driving for a ridesharing service, delivering groceries, or other easy tasks.

3.How to Start an Insurance Company Quickly

Want to know how to start a insurance company the fast way? You can buy a book of business from another agent. Agents retire, move, and sell their current clientele all the time.

You can purchase their existing clients and policies, giving you immediate, recurring customers and commissions. This can give you a massive boost, though you’ll need the money upfront to make it happen.

Also, note that clients that you purchase aren’t locked in. They can leave any time and sign up for a new policy with other agents. So when you make a purchase, make sure to reach out to clients and give them a reason to stay on with you. You can send them a gift or a card or find other creative ways to impress them.

4.Get Insured

When selling insurance, or operating any type of business, you’ll also need to be insured. At the very least, you’ll want a BOP, or business owners policy. This will provide general liability coverage. It can also help cover any equipment you use for your business. 

As an insurance professional, making recommendations to your clients that affect their life and finances, you can be held liable if you make a mistake. You’ll also want professional liability insurance in the event that your recommendations lead to problems for your clients down the road.

5.Have a Clear Plan for Growth

Before you ever get started, you’ll need to have a business plan. In your plan, you need to outline your clear path to success. 

You’ll want to lay out how many clients you hope to acquire in a year. Then, break them down month by month, week by week, and day by day.

Set your revenue goals, your policy and bundling sales goals, and your marketing goals. Do you plan on bringing on other team members to grow your business? Create a timeline of when you hope all of this takes place.

6.Build a Marketing System

In order to grow your business, you need to invest in marketing. To build a reliable income as an insurance agent, you need a steady stream of new clients.

There are many ways to attract new clients. You can invest in paid, online advertising. Or you can focus on SEO, improving your search rankings to earn organic traffic to your website.

You can also opt for physical advertising, which includes billboards, posters, and other printed advertisements.

And don’t forget to market to existing customers. The bulk of your revenue will come from recurring clients. Once you get a new client, do everything you can to keep them with you, as this is far more cost-effective than attracting new clients. 

Starting Insurance Company; Guaranteed Success

Now that you know how to start an insurance company, you can get to work right away. The biggest benefit of this type of business is that it has a clear path forward, as many millions have pursued this path to success before you.

Looking for more tips like this? Be sure to visit our blog today to keep reading.