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Submitted by: Annie Gelinas
If you ve worked in insurance for a while, you may have thought about striking out as an independent insurance broker. With the right experience and backing, there s no reason not to do this, but you should not underestimate the challenges.
Insurance brokers act as an intermediary between insurers the big firms and clients, individuals and businesses. Independent insurance brokers must be impartial, offering whole-of-market advice to their clients, thereby providing them with the best solution for their needs.
What qualifications will an insurance broker need?
Unsurprisingly, becoming a successful insurance broker will almost certainly involve a significant period of training and gaining experience. You will also need to make sure you comply with the regulations imposed by the industry. Since you will probably have worked elsewhere in the field perhaps for another broker you may already have collected most of what you need. Depending on the brokerage you will have undergone various placements and training as part of your apprenticeship or training scheme. Trainees will usually have completed a relevant qualification, such as the Certificate in Insurance accredited by the Chartered Insurance Institute. However, the requirements for this are not as onerous as a degree, and it can be carried out online and on a part time basis.
In addition, every insurance broker in the UK has to be regulated by the Financial Services Authority, which costs at least 1,000 per year. On top of this there are the fees you will need to pay to the Financial Services Compensation Scheme and Financial Ombudsman Service, all of which add up. Professional indemnity insurance is another expense you must allow for.
Relevant experience
Aside from these qualifications and requirements, you will have probably built up some kind of idea about the sector of the industry you want to target. Over the years you will have gained insights into the world of insurance or, at least, certain sub-niches of it. Before you start out, then, you need to think about the type of insurance you plan to sell. Bear in mind that the larger insurers will be wary about using small insurance brokers, especially newly-established ones. If you have a specialist area it makes things simpler. In any case, starting as a new insurance broker is very competitive due to the number already in business, so having your own niche gives you a better head start.
Building momentum
Unless you have special circumstances, you will be starting slowly as you won t have a good list of clients, or contacts who might be interested in your new service. As with any fledgling business, starting out as an insurance broker could mean you make a loss in your first year. It is vital that you have the cash reserves to cope with this, since it may be some time before you start turning a profit. Even when you break even and start to bring in more commissions, you should plan for a limited annual income since you will need to invest in your company in order to position it well for the future and pay for unexpected expenses and difficult times.
Finding the right people
It s a maxim of business that success is down to fostering the right relationships not what but who you know. That s as true for the insurance broker as for anyone. People are absolutely key to your success: you must have or be able to build up a list of clients who all know you can give them the information they need and save them money as a result. If you don t have these contacts, your chances of growing your business are limited. If you have worked in insurance before then your previous employer will probably have placed contractual restrictions on you for a certain period of time effectively to stop you poaching the clients they rely on for their business.
Conclusion
Starting out as an independent insurance broker can be tough and is a long-term prospect. Apart from the training and regulatory requirements, you will need to know your way around a particular sub-niche and have good prospects for building a contact list of interested clients.
About the Author: This article was supplied by
Irish insurance brokers
members of the
Irish Brokers Association
, Robertson Low, established in 1995 and the only Irish incorporated Lloyd s broker .
Source:
isnare.com
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