Opening Your Own Independent Insurance Agency
Opening your own independent insurance agency is only the first step in exceling. There are many independent insurance incubators available that helps you finance an insurance agency. Also, you can choose what model to go for while operating an insurance agency.
If you are wondering how to start an insurance agency in Tennessee, this article will guide you. The industry market is widely transforming. In that context, it can be tough for you as an independent agent to open an insurance agency in the insurance industry. It is also crucial to understand the core of every aspect involved with the agency. Hence, here are some ways that will make your start easier.
Why Become an Independent Insurance Agent?
Independent insurance agents are agents who represent multiple carriers. An independent insurance agent has the freedom to sell personal and commercial lines of insurance such as life, health, auto, liability, and property & casualty. Unlike captive agents, independent insurance agents enjoy the flexibility and independence all why growing personally and professionally similar to an insurance broker.
Clients usually seek expert advice from agents as they will not know how insurance works or which deal might be the best for them. Clients want to find an agent who can give them proper guidance. Insurance clients prefer advice from independent agents more than captive agents as they have a wide range of policies to offer for clients.
According to the Bureau of Labor Statistics, an independent insurance agent’s median annual wage as of 2020 was $52,180. Further, they earn commissions through renewals that help them increase their income. Therefore, find out how to become an independent insurance agent and start your own agency.
How to start an independent insurance agency in Tennessee?
Start an insurance agency through a Book of business
The first option is to buy a book of business from an existing insurance company, which will allow you to handle your agency while owning it. However, depending on its profitability, it may cost you may be costly as from $250,000 to $500,00, or even more
Become an independent agent through an agency model in Tennessee
The second option is to become an independent agent through an agency model. You can choose between the Franchise model or the FMO Model.
The franchise model provides you with operational assistance alongside access to insurance carriers. However, the fees could be high. The bright side of it is that your agency is associating with an established brand that will add value to your company. But on the other hand, this model does not provide agents with much space for growth due to their contracts’ non-compete clauses.
In the FMO model, generally, they split the commission with their agents. The split between the Model and the agent will be around 70/30. This benefits both the model and the agents.
Key Takeaway on How to Start an Insurance Agency in Tennessee
It might be an overwhelming experience for independent agents as to which option they should select. Hence, according to recent reviews from agency models, the FMO model has shown positive results comparatively. Independent agencies enjoy a lot of freedom and authority like an insurance brokerage. By applying above mentioned steps, you will understand how to start an insurance agency in Tennessee. Similarly, if you are wondering how to start an insurance agency in North Carolina, you can get in touch with us for more guidance. You can also contact us for assistance on cyber insurance and digital transformation in insurance.
When you are opening your own independent insurance agency, you should also know about your independent insurance agency organizational structure. This helps a lot in agency management.