Independent Insurance Agency Organizational Structure
The independent insurance agency organizational structure
Explains the reporting relationships or supervising other positions. Typically, it includes departments with managers and direct reports underneath. Your structure also depends if the agency if producer focus, carrier focus or client focus.
It can be daunting for you as an independent agent to open an insurance agency in the insurance industry. To guide you and assure you of your kickstart to your agency, we have some short-cuts that will make it easier for you if you are wondering how to start an insurance agency in Texas.
Who are independent insurance agents in Texas?
Independent insurance agents are agents who are associate with multiple insurance companies. They are not tied to a single insurance carrier. Independent agencies enjoy a lot of freedom in their business model similar to an independent insurance brokerage. Due to this job’s flexible nature, they have open to selling insurance of different lines such as life, health, and property & casualty insurances. According to the balance SMB, agents sell on behalf of insurers who have granted them an appointment which is a contractual agreement between the two parties.
Agents are vital to their clients as their decisions widely depend on the suggestions independent agents offer. Clients tend to rely more on them as they provide more choices and are not locked into specific products or carriers. Hence, they can comparatively be better at satisfying their clients with the right coverages.
According to the Bureau of Labor Statistic, an independent insurance agent’s median annual wage as of 2019 was $50,940. Further, they earn commissions through renewals that help them increase their income. So, gain a head start in your insurance career by learning how to become an independent insurance agent.
How do you start an insurance agency in Texas?
Buying a book of business would be the first option. Agents can buy this insurance book from an already existing insurance agency. However, this may cost agents $250,000 to $500,000, or even more, depending on how profitable it is.
The next option would be to become an independent agent by using an agency model. Agency models are designed to aid your independent agency with needed support and assistance. Agents will focus on selling insurance while the agency will provide all the operational assistance that your agency needs.
Further, there are two options inside of agency models as well. They are as follows:
Franchise Model to Start off with an Insurance Agency
The franchise model provides you with operational assistance alongside access to insurance carriers. The bright side of it is that your agency is associating with an established brand that will add value to your company. However, this model does not provide agents with much space for growth due to their contracts’ non-compete clauses.
Insurance FMO Model for Your Agency in Texas
In the FMO model, generally, they split the commission with their agents. The split between the FMO and the agent will be around 70/30. In some insurance agencies, the split is very advantageous. For instance, In Covered by SAGE provide a split of 80/2- for the first year and 50/50 for renewals.
Hence, these are the ways through which you can get a complete idea of how to start an insurance agency in Texas. If you are interested in learning how to start an insurance agency in Tennessee, you can explore similar options as well. You can get in touch with us if you want to understand about an insurance agent brokerage firm and cybersecurity insurance for agencies.
When you know how to become an insurance sales rep, you want to start your independent journey. Hence, understanding about independent insurance agency organizational structure is crucial.