Start An Agency
guidelines and points of interest
So you are thinking of starting an independent insurance agency?
This is a major consideration and we at the Independent Insurance Agents of Virginia share your excitement and applaud your initiative. The information that follows is meant to provide many guidelines and points of interest as you begin planning. Please understand that we want to help. At some point contacting us directly, coming into our offices for a visit and/or discussing your ideas with others in the agency business are strongly urged.
This toolkit (see below) is designed to educate and assist in the process of starting an independent agency, but it is up to you to make it happen. Building an agency from scratch is possible. Many accomplish this annually in Virginia. If you're successful, the rewards are considerable, including the ability to call your own shots, a healthy return on investment in the form of owner’s equity and the satisfaction of being in a business that protects people and their valuables. On the other hand, starting an agency from scratch is challenging . . . and requires plenty of hard work.
Critical success factors necessary to make it:
- Capital – While an independent agency is not capital intensive relative to other industries, you can expect to need approximately $20,000 to $50,000 in start-up capital to pay for things such as office space, management software, fees, equipment and furniture, E&O insurance and marketing; and that doesn’t count resources necessary to live on while you build your customer base. Many have started with far less, however.
- Access to insurance companies – You can get licensed but you can't sell insurance without access to insurance companies (carriers) and managing general agents. For property and casualty insurance, most companies are looking for a long-term relationship. Getting an appointment usually requires, among other things, experience in the business, a track record of successful marketing and selling, a marketing territory geographically desirable to the companies and a solid proposed business model. You will find most carriers insist on at least a few years of experience before entertaining appointments. Many also require detailed financial information and a solid written business plan before consideration.
- Good sales and administrative skills – Some people have great selling skills and can make great insurance producers. Other people are terrific administrator and service-minded. Starting an agency from scratch will require both sets of skills until you get large enough to hire others.
- Thorough technical expertise – Customers are placing their risk management needs in your hands, therefore you need to understand the products you're selling. Depending on the lines of business you intend to offer, there are scores of different policy forms and coverage implications. Add to that the importance of understanding the risk management process itself, and you have a very knowledge-intensive profession.
If you're still interested --- and we hope you are --- this toolkit will walk you through the steps necessary to get started and provide resources to help you implement the steps where possible:
New Agency Toolkit
designed to educate and assist in the process of starting an independent agency
This toolkit is designed to educate and assist in the process of starting an independent agency, but it is up to you to make it happen. If you're successful, the rewards are considerable, including the ability to call your own shots, a healthy return on investment in the form of owner’s equity and the satisfaction of being in a business that protects people and their valuables.[more]
questions from those considering starting an independent insurance agency
Frequently asked questions from those considering starting an independent insurance agency.[more]
Help for Start-Ups
companies willing to work with new, start-up and small agencies
IIAV members have access to this resource in which they can search for companies which are willing to help newer, start-up and/or small agencies.[more]
free business counseling and mentoring
Whether you are just starting a business or expanding an established business, SCORE counselors are here to help you succeed. Sign up for an appointment to meet with a business counselor to develop your business plan, discuss a new idea or tackle a business problem. There is no charge for counseling, no matter how many sessions are needed. [more]
Other Helpful Information
start-up checklists and more
Start-up checklists and more.[more]