Selling Insurance Independently: Is It Right for You?

If you're thinking about changing careers and getting started in the insurance industry, you may be wondering if selling insurance independently is the right option for you. There is certainly no shortage of demand for insurance business - in general, the insurance industry grows around 8% each year. The decisions involved are whether you want to become a captive agent or an independent insurance agent, and which types of insurance you want to sell.

State licensing requirements vary. It would be best to do your research to determine the licensing requirements for your insurance license - different states require different license exams and other conditions. Some states also require you to take continuing education to keep your insurance license. Understanding the licensing requirements is a vital part of the decision-making process when entering the insurance industry.

In this article, you'll learn more about the difference between captive agents and independent insurance agents, selling insurance as an independent agent, the value of being an independent insurance agent, how your status as an independent agent is valuable to your clients, and whether becoming an independent insurance agent is right for you.

Captive and Independent Insurance Agents: What's the Difference? 

There are several differences between captive agents and independent insurance agents. For example, captive agents sell insurance products from only one insurance company. Independent insurance agents can sell insurance products from multiple insurance carriers once the insurance companies approve them.

Captive agents get less control over their business decisions because they must follow the rules of the insurance company to which they are bound, but they also have brand recognition in their favor. Independent agents get more freedom when making business decisions, but they also do not have the name of a nationally known insurance business behind them - they have to build a name and reputation for their insurance agency themselves.

Independent agencies sell more commercial lines policies than captive agencies. This generally occurs because business owners prefer to shop around. Independent agencies can shop around for liability insurance, health insurance, and car insurance on behalf of their clients.

Selling Insurance as an Independent Agent? Use These Techniques

Because insurance sales agents who are independent do not have the same trust factor as captive agents, selling insurance products to clients requires different techniques.

1.  Establish trust with your clients. As we mentioned, as an independent insurance agent, you won't have a household insurance company name behind you. You will have something that captive agents don't: the ability to shop around with multiple insurance carriers to find the insurance product that meets your clients' needs and budget. Because your goal is to meet their needs and not just sell them an insurance product, your insurance agency is in a unique position: serving clients' needs, not only selling insurance.
   
   
2.  Create personal relationships with each client. As an insurance agency with access to multiple insurance carriers and insurance products, you can build trust to create the perfect insurance package and create personal relationships with each client. You can use CRM software to send out birthday cards or emails to your clients. If a client tells you about an exciting event coming up, such as purchasing a new home or graduation, call them to congratulate them after the event. This isn't just a selling opportunity for a new product, such as homeowners insurance or a new life insurance policy, for example. It builds and reinforces the personal relationship. It can also lead to referrals.
   
   
3.  Make your clients feel secure and like you care. Creating a personal relationship with each client is one way to do that. One of the reasons people choose an independent insurance agency is that they do not have to call multiple insurance companies on their own to get quotes on insurance products. They want to feel like you care. They want to feel special. What are some things you can think of that you can do to make your clients feel like you care? Think about some customer experiences you've had that made you feel special and that made you tell your friends and family what a great experience you had.
   
   
4.  Offer policies that they may need. As an insurance agent, your main job is to help your client protect what they own. Your clients count on you to understand their needs. There are times when you must point out various insurance products or suggest an increase in policy limits. This is generally referred to as cross-selling, up-selling, and rounding accounts. Being told "no" is expected. However, as client relationships grow and as your clients come to trust you, when your clients are ready to purchase additional life insurance policies or when they need a new health insurance policy or other types of insurance, you'll be at the top of their minds.

Why Become an Independent Insurance Agent?

There are many advantages for independent agents. You aren't bound to a single insurer. You get to shop around to find the perfect insurance product for your client. The more insurance carriers you are approved by, the more options you have to offer your clients.

You get more independence as a business owner. As an independent insurance agent, you aren't bound by the advertising rules of a parent insurance company.

You aren't advertising a single insurance company. While that can have its advantages because of household name status, you have the opportunity to build your brand. Your name and your insurance agency name and reputation can be stellar and the go-to brand for savings and client care for all types of insurance in your area.

How to Make Your Status as an Independent Agent an Advantage for Clients

As an independent agent, everything you stand for is an advantage for clients and prospective clients. You don't work for a single insurer. Your main job is to serve others. You met the state licensing requirements to shop around with insurance carriers on behalf of your clients to find them the best coverage at the best rates. Your insurance agency is a concierge service for insurance products on behalf of your clients.

Your clients don't have to spend their time on the phone or computer getting quotes on life insurance, health insurance, car insurance, home insurance, or liability insurance. Their agent works for them to get the best quotes. They choose the policy that they want and pay their independent insurance agent.

Is Becoming an Independent Insurance Agent Right for You? 

If you're interested in getting started in the insurance business, the main question is whether becoming an independent insurance agent is right for you. Selling insurance and owning an insurance agency do come with risks. That is something that you must consider: you must be open to those risks.

Additionally, when we compare captive agents and independent agents, independent agents are paid a larger commission on insurance product sales. They could make as much as 50% on initial sales. An independent insurance agency can be a lucrative and profitable career if you are driven and enjoy serving people.

The good news is that there are tools available for independent insurance agents to help them learn how to manage the risks and how to make more money. SIAA provides impressive tools, training, coaching, and profit-sharing opportunities for independent agents, all at your fingertips!