How Much Does an Entry Level Insurance Agent Make?
How much does an entry level insurance agent make? This is the question everyone asks. However, understanding the role of an agent is important in the first place. An independent insurance agent represents an agent who is associated with multiple carriers.
It means that these agents represent various insurance companies and sell the products and policies to clients on behalf of respective companies/agencies. Likewise, an independent insurance agency in Tennessee provides independent agents a wide variety of policies and insurance lines to sell.
To further understand Independent Insurance Agencies, let’s learn about the benefits and how you as an agent can also start your own agency in the coming days.
How much does an entry level insurance agent make?
The benefits that come along when you become an independent insurance agent are many. It gives you more room to grow, along with flexibility and independence to choose the products you want to sell like an insurance brokerage.
According to Insurance Information Institute, there were 36,500 independent agencies in the USA in 2018. Since agents will have various policies for clients to choose from according to their needs, this will give them a sense of confidence.
Due to this reason, clients tend to find an agent who is independent relatively more than captive agents. Furthermore, Independent agents have an additional source of income through commissions similar to an insurance broker, unlike that of captive agents. Discover how to become an independent insurance agent and embark on a journey that is extremely rewarding.
How to Start an Independent Insurance Agency?
Agents will need additional guidance and support so that their agency can run smoothly in the right direction. Here we have two options for agents that will help them proceed with their agency with positive outcomes.
Buying a book of business for the insurance agency
Agents can buy a business book from an already existing agency, which will allow them to run the agency. However, it might cost a high price from around $250,000 to $500,000 or even more. It will be similar to having a sole proprietorship.
Becoming an independent agent through an agency model
Agency models assist independent agencies with required support and responsibilities. An independent insurance agent can sell insurance while receiving the proper operational assistance their agency needs. Furthermore, they can select one from these two agency models described below:
This model allows agents to own your insurance business and grow your book accordingly. The agency will be associated with an established brand that adds to its goodwill. However, independent insurance agents will not necessarily get enough room to grow due to the non-compete clause.
Insurance FMO Model
This model also provides the same services as the Franchise model, but with more benefits. Usually, they split the commission with their agents on a 70/30 basis. This model’s popularity is increasing with time. Agencies applying this model seem to be showing positive results.
Key Takeaway for Independent Insurance Agency
It would be best if you chose the right option according to your company’s goals and mission. Additionally, independent insurance agency Tennessee believes that it is also necessary to choose the model that will help the company grow. With the rise of the FMO model, it might be just the right choice for agencies. If you want to know the cost of e&o insurance for consultants then research more. Also, read our blog on cyber insurance as it contains crucial information about data security for a modern agency.