By Joseph Totah
According to a recent article in the insurance journal, 4,000 independent insurance agencies were founded in 2008, 2009 or 2010. Most new independent agencies have been started by either individuals who have previously operated a captive agency or have been a producer of an independent agency. Starting an agency you can call your own allows for more freedom, making your own decisions, better income and pride of ownership.
Starting an Independent Agency has not been easier for a number of reasons. First, there are a growing number of cluster type groups that are looking to grow their ranks by adding Insurance Agencies. Second, the available technology that is out there has made it easier for both the Insurance Agency and the Carrier to do business. Third, the cost of running an agency has come down, most especially when it comes to technology and the benefits of technology.
The growth in technology available to Insurance Agencies has skyrocketed during the last 5 or so years, with technology getting cheaper and cheaper. There are a number of new Management System vendors that incorporate social media into their system and it no longer cost over 10k to get a system for you agency, systems now start at just over $1000 per year, perhaps less in some cases. In addition to the management system, there are number of online services, while some are target for insurance agencies and there are many services, such as box.net or docusign.com that provide tools that are very useful to the operation of an agency. To find a list of Insurance Agency Management systems and technology, please use the menu on the left to choose one of these options.
Because technology and the efficiencies of technology, it has reduced the cost of running an Independent Agency. First of all, the technology does not cost as much, but it doesn't end there. It no longer takes as many staff members to run an agency, thus saving on payroll related expenses. Secondly, you don,t need as much office space since there is automated office don't need file cabinets, as much supplies, and workspace. For some agencies, it make may sense going virtual to some degree, perhaps with the assistance executive suite services.
While going independent is not for all captive agents, those who do want to go independent now have many options. Cluster type groups have opened up the doors to allow many new agencies to start up. Technology vendors have come to the plate bringing you more affordable technology than ever. The savings from the cost and benefits of technology have made possible for the smaller agency.
Will it be easy, certainly not in the beginning, but if you play your cards right and truly enjoy this business, in can work out well for you over the long run. My experience is starting an independent agency after starting a captive agency in easier for a number of reasons. Doing it for the 2nd time around, you have product knowledge, your sources of influence, being established and having gained confidence from succeeding the first time around.