Business Category Business: career motivation and tips to move ahead

How to start an insurance company

Starting an insurance company can be a long and complicated endeavour, requiring years to get funding. However, this does not have to be the case for everyone.

If you want to own your own insurance agency, start early and take the necessary steps to get your foot in the door. Read more to learn how to start an insurance company in your state.

Decide on a specialisation. Most insurance agents sell many types of insurance, include health, life, automobile, flood and homeowner's insurance. If you plan to start your own insurance company, it's best to specialise in all areas.

Become a licensed insurance agent. Before you're eligible to sell insurance, you need to successfully pass several state examinations. These examinations test your knowledge of various insurance types and plans. Once you've completed the test, you can receive an insurance license.

Work as an insurance agent. New insurance agents aren't eligible for their own agency. You'll need to gain about five years work experience. You can choose to work as an employee for an insurance firm, or become an independent contractor for an insurance company. Independent contractors can work from home and set their own hours.

Get a corporate insurance license. Once you become eligible to start your own insurance company, you'll need to obtain a corporate insurance license. This gives you the ability to sell insurance products under your company's name.

Apply for a business loan. Unfortunately, starting an insurance company isn't cheap. It can cost between £65,000 and £650,000. You'll need an excellent credit history, plenty of work experience and a sound business plan.

Buy a franchise. There are different ways to start your own insurance company. You can open a franchise and work as an independent agent for a well-known insurance company. Some franchises offer private financing.

Open your own insurance company. If you don't have enough start-up capital for a franchise, open your own private firm. You'll need to establish a relationship with insurance brokers and finance companies. These companies provide the insurance products.

Look for a location. Once you've secured a business loan, it's time to find a storefront location. It's best to start small. Choose a small location that receives ample foot traffic, and is perhaps within a busy shopping district or near a major intersection.

Things Needed

  • Insurance license
  • Corporate license
  • Business loan
  • Business plan
  • Location