Congratulations! Starting an independent insurance agency from scratch is an exciting and challenging venture. You’ve taken the leap and First Connect is here to help. Here’s a comprehensive checklist to help guide you get set up.
Complete Legal and Regulatory Compliance
- Start by choosing a business structure (LLC, S-Corp, etc.) and register your agency with the state. The U.S. Small Business Administration is a great resource to help you through the registration process.
- Apply for a state insurance license for each line of business you’ll offer (property, casualty, life, health, etc.). Verify whether you need an Agency license aside for your personal one (according to your business structure and state).
- Obtain Errors and Omissions (E&O) insurance to protect against potential liability claims.
Looking to obtain an Errors and Omissions policy with a reputable carrier quickly? Click this link to quote, bind and get your proof of coverage.
- Familiarize yourself with the National Association of Insurance Commissioners (NAIC) regulations.
- Understand and follow your state’s insurance laws and consumer protection laws.
Get Carrier Access
- Use First Connect’s Appetite Finder and Carrier Store to find the relevant carriers for you and request access to them. Click here for information on how to place a request for a carrier.
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- We are always adding new carriers so be sure to check these tools every week to explore our new offerings. We’ll also notify you about new carriers via email and Agent Portal notifications.
- Get to know your carriers; the Carrier Store has all the resources you need to understand the carrier’s appetite, guidelines, and processes.
Set up Your Technology Stack
- Make sure you have your office set up with the necessary equipment to receive customer calls and handle their quotes.
- Decide if you need a customer relationship management (CRM) system and/ or an Agency Management System (AMS), at this time
CRMs are systems that help you manage your leads and customers; an AMS is more focused on the policies and their lifecycle once bound. Many scratch agencies choose to skip these when getting set up, and that is perfectly fine; just make sure you have a system to store your data, such as a spreadsheet.
- It’s also worth considering a free productivity platform, such as Trello, to track sales opportunities. These platforms allow agents to set up pipelines, aligned to their sales process, to ensure every opportunity is followed up on.
- Explore comparative raters. These can streamline your quoting process, serving you multiple quotes quickly without double data entry.
Build Your Network and Market Your Agency
- Network with local businesses, join community organizations (such as Rotary), and attend events. Your local Chamber of Commerce is always a great avenue – find yours here.
- Establish your agency’s brand including a logo, color scheme, and a consistent visual identity. Build a user-friendly website with information about you, your services, and contact information. Easy-to-use platforms like Canva and Wix provide simple solutions for small businesses like yours.
- Set up social media business accounts on platforms like Facebook, LinkedIn, and Instagram.
- Develop a content strategy that includes tips, insurance information, and agency updates.
Establish Your Financial Management Plan
- Set up accounting software (QuickBooks, Xero, etc.) to track business income and expenses.
- Set up a separate business bank account for all agency transactions.
- Plan the agency’s budget: manage overhead costs and expenses.
- Plan and track your commissions:
- We’ve made commission tracking easy. In the First Connect Agent Portal, visit My Commission every month to see your commission payments.
- First Connect carrier commissions are paid on the 15th each month for the previous month’s policies (depending on the carrier). Click here for more detailed information on commissions.
- Set up a system to track commissions from your non-First Connect carriers and ensure timely payments.
Set Up Sales Processes
- Identify your target demographic (age group, location, insurance needs).
- Begin sourcing leads that fit your target audience; effective lead sources include formal and informal networking efforts, digital advertising, and paid lead gen partnerships.
First Connect has existing lead gen partners, both commercial and personal, that offer exclusive discounts for First Connect Scratch Agencies. For more information, visit the Agent Tools page.
- Develop a sales process that includes quote proposals, follow-ups, and closing tactics.
- Create a streamlined process for onboarding new clients, including applications, document collection, and policy explanation.
- Consider Canopy Connect for smoother customer data collection. Ask your onboarding manager for more details on the Scratch Agency discount.
- Measure your business performance through KPIs like customer retention rates, sales growth, and marketing ROI.
Customer Service & Retention:
- Client Communication: Implement a protocol for regular client updates via email or phone and utilize CRM tools to manage relationships and policy renewal reminders.
- Client Education: Offer annual policy reviews and develop strategies to educate clients on their coverage and policy changes.
- Claims Support: Understand carrier claims processes and assist clients with filing claims, serving as their advocate throughout the process.
- Retention Strategies: Prioritize proactive engagement to maintain client satisfaction and foster long-term loyalty.
Technology and Security:
- Data Security: Establish strong cybersecurity protocols, including data encryption, secure passwords, and regular backups, to safeguard client and agency information.
- Client Access: Provide a secure online portal for clients to access policy documents, make payments, and file claims.
- Technology Integration: Leverage tools and systems that streamline operations while maintaining high security standards.
- Proactive Monitoring: Regularly audit systems to identify vulnerabilities and ensure compliance with security best practices.
Networking & Relationships
- Carrier Partnerships: Build strong relationships with underwriters and carrier representatives to enhance access to quotes and competitive rates.
- Industry Memberships: Join associations such as the IIABA or your state’s insurance association to stay connected and informed.
- Event Participation: Attend industry events, webinars, and conferences to expand your professional network.
- Community Engagement: Actively participate in industry groups and forums to exchange knowledge and foster meaningful connections.
Growth and Scaling:
- Performance Tracking: Monitor KPIs such as customer retention, sales growth, and marketing ROI to measure business success.
- Expansion Planning: Strategically refine product offerings, consider new locations, and hire additional agents to scale operations.
- Client Advocacy: Leverage customer testimonials and implement referral programs to boost growth through client satisfaction and word-of-mouth.
- Continuous Learning: Stay updated on industry trends, market changes, and regulations through webinars, blogs, and other resources.
Looking Ahead
- Offer annual policy reviews to keep clients informed and engaged.
- Understand the claims process for each carrier you work with.
- Stay up to date with industry news by following relevant publications and blogs. Below is a good list to start you off:
- Verify continuing education requirements and maintain license renewals.
- First Connect offers complimentary CE courses through ExamFX as part of our rewards program. Learn more about First Connect Rewards and the benefits you can earn by clicking here.
This checklist covers the key steps to get started and maintain a thriving independent insurance agency. The process can take time, but having a solid foundation will make scaling your business easier and more sustainable!