How to Become an Independent Insurance Agent

Katie Wilmoth | April 4, 2022

Two independent insurance agents discussing documents and contracts in front of a big glass window.If you’ve been a captive or dedicated insurance agent for a while but are tired of feeling unable to meet your clients’ needs due to limited product options and premium rate hikes, you aren’t alone.

Why You’d Want to Go from a Captive to Independent Insurance Agent

The Pandemic’s Impact on the Insurance Landscape

Since the beginning of the pandemic, the insurance marketplace has evolved rapidly. While it has undergone regular, cyclical changes like a hardening market, it has also changed during the pandemic as carriers and agents react and adjust to changing customer needs. 

Captive Insurance Carrier Policies 

Carriers are changing how they package policies and changing their rating guidelines. Due to these changes, Excess, Surplus, and Specialty lines of carrier business have risen dramatically out of necessity. Many carriers are going direct to consumers and/or increasingly partnering with independents. 

Increased Competition from Independent Agents

Now, more than ever, it’s essential to have a diverse portfolio of products in your agency’s pocket and to be able to put together an appropriate coverage package for most of your clients. This has dedicated agents feeling the pressure of competition from independents and frustrated as they struggle to grow their revenue. If you’re a captive experiencing these challenges and feeling lost about how to transition into the independent world, an independent agency network can help guide you.

Barriers to Becoming a Non-Captive Insurance Agent and How to Overcome Them

Illustration of white arrows hitting a wall with a red arrow in the middle breaking through.Dedicated agents often benefit from being well-trained and seasoned veterans in the industry. But the challenge of starting a business from scratch and without assistance can seem daunting. As an independent agent, you’ll have access to a multitude of different coverage options for your clients and be able to run a much more profitable agency.

Independent insurance agency networks can help a new or established agent navigate the journey from being a captive insurance agent to an independent one. With careful planning and a good partner by your side, you can overcome most of these challenges.

Appointments with Top Insurance Carriers

Many agents feel intimidated about going through the appointment process and obtaining strong carriers. Former dedicated agents already have a solid foundational knowledge of writing insurance but may not have built relationships outside their primary carrier. Networks can assist agents in getting started in the independent world as they have built and established relationships with hundreds of carriers.

Volume Requirements

Another difficulty captives may face is learning how to balance satisfying the volume requirements expected of numerous carriers. Agency networks, clusters groups, and aggregators work with new agents to negotiate lower volume requirements on your behalf. While you’ll usually be expected to share a portion of the commissions you earn, partnering with a group like this can make it much easier to grow your book and increase revenue faster. The agency will also negotiate higher than direct commission percentages and give you the chance to share in bonus/contingency opportunities from the combined network premium.

Promoting Your Independent Insurance Agency

It can be intimidating to go from having the name recognition of a large carrier on your door to being a small start-up agency with no national marketing budget. There is no parent carrier feeding you customers or clients. 

Utilize free marketing via social media as much as possible and focus on what sets independents apart, like the ability to customize coverage AND find it at the most competitive rate. A large portion of your initial and continuing client base will come from referral business — and your reputation will be of critical importance.

Learning Complex Products and Markets

It is a steep learning curve to be able to remember, learn and navigate many different carrier products and markets. Agency networks have dedicated sales staff in your state who are experts and extremely knowledgeable about all the other markets available. They also have local and regional carrier relationships and can put you in touch with those reps when you need guidance or assistance.  

When you’re ready to expand into different lines of business, they provide dedicated staff to help you learn how to write business in unfamiliar territory. Having a partner to use as a resource during this time is a critical step in ensuring your success. 

How to Become a Non-Captive Insurance Agent — the Key to Success

While many factors contribute to starting a successful agency, having an expert partner by your side is one way to ensure your success and not have to go it alone.

Get started with Smart Choice® today!

Katie Wilmoth