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We have dozens of reasons for loving the independent insurance industry. We won’t list them all here, but one big reason is that independent insurance agencies offer Texans a wonderful entrepreneurship opportunity—a chance to build a business, serve your local community, create jobs, and make money. If you’re interested in starting an independent insurance agency, your first step is to read this entire page. (Be sure to view the documents too.) Your second step is to become a member of IIAT to get access to the support you’ll need. Step 1: Lay the GroundworkDo the research and make the necessary preparations to set yourself up for success.
Step 2: Create Your Business PlanIf you want to create relationships in the insurance industry—and you do, trust us—you need a formal business plan. Here are the five things your business plan must include.
Step 3: Get the Legal Stuff RightThere are many rules and regulations that apply to operating an insurance agency in Texas.
Step 4: Get Access to Insurance MarketsIdeally, you will schedule appointments with established insurance carriers that have broad, competitive insurance products. But that’s difficult to do without at least three years of experience and a sizable book of business. For most start-ups, market commitments come from a combination of a few possible direct appointments and/or indirect markets, such as wholesalers, managing general agencies, and market aggregators. Direct Appointments = If you become an IIAT member, you automatically become a member of the Independent Insurance Agents & Brokers of America (Big “I”). This will expand the number of insurance markets at your disposal. IIAT Advantage = This is the name of the IIAT insurance marketplace, which is receptive to working with new agents. Learn more about IIAT Advantage. Wholesalers & Managing General Agents = Wholesalers and MGAs represent insurance companies. They’re receptive to new agents, and they’re able to offer specialty insurance. Many will have few or no commitments, as they retain a portion of the commission and are compensated per transaction through policy fees (which are passed along to the customer). The Texas Surplus Lines Association has information on wholesalers and MGAs. Market Aggregators = These groups help new agents set up their first office, access otherwise inaccessible markets and programs, the chance to get direct appointments, and a chance to share in the network’s profitability. In return, they ask for a percentage of commission, a membership fee, or give up a small stake in the value of the book of business built up through the aggregator. Review the contract carefully, especially as it relates to book ownership, commission, revenue sharing, and exit costs. Step 5: Get an Agency Management System (AMS)An agency management system (AMS) is software that will be fundamental to your agency’s success. Your AMS will provide a framework to all of your business processes. The most successful agencies operate as digitally as possible. Agency management systems range in cost—from $1,000-$5,000 for a start-up, with monthly fees of $60-$600. A high-quality AMS will more than pay for itself in time. When you join IIAT, you also become a member of the Independent Agents & Brokers of America, which has an Agents Council on Technology. The ACT website has resources to help agencies harness technology to maximize productivity and profitability. Check out IIAT's partner, Catalyit, for all your technology solutions. Step 6: Create a Procedures ManualIt’s estimated that 1 in 5 insurance agents in Texas will be involved in an errors and omissions (E&O) claim. To avoid this, create a procedures manual, which creates structure and guidelines for how you conduct business. Your procedures manual should be updated regularly. Step 7: Get TrainingIf you’re going to be successful, especially in the long term, you need to regularly educate yourself. IIAT offers its members hundreds of training opportunities.
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