Independent Insurance Agent
  Broker Concept

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Broker verses the Captive Agent Concept
Understanding the difference.


the independent insurance agent broker concept is one of several ways the insurance industry delivers their products to the public. The two most popular ways are the captive Insurance agent concept and the independent agent or broker concept.

This page will discuss the independent insurance agent (or) broker concept.

This article will try to identify what a brand new agent will face if just starting out as an independent agent without any formal training. new agents coming into the insurance business need to totally understand what a broker contract is.

making the wrong decision will impact your income and your family's well being. I personally think starting out with a broker company is the wrong way to go, unless that broker agency has some type of training program. but that is up to the individual person to decide. I can only present the facts to help you in your decision.

As a general rule, insurance agents with at least 4 years selling experience should only go to work in an Insurance broker agency.As a general rule, only experienced insurance agents should go to work in an Insurance broker agency.

As a general rule, insurance agents with at least 4 years selling experience should only go to work in an Insurance broker agency.  

This article in no way reflects what a new agent can expect if they went to work for a independent broker agency. 

However, a majority of the reputable broker agencies/companies do not look at hiring neophyte or new agents. As a new agent, if you do decide to go to work for an independent broker agent and not a captive company, you need to take a really hard look at who is hiring you, and find out what kind of training is made available for you and the track record this broker agency has with neophyte agents. 

The Independent Insurance Agent Broker concept is the purest of the free enterprise system.

You are hanging out your own shingle. You are your own boss. You can build a business that you may be able to sell in the future, and can reap all the benefits if it is successful. You can hire people under your ground rules. However, you will need to put up all the operating capital on your own to make this happen..

The Independent Insurance Agent Broker Concept

The insurance broker or independent agent contract is usually for someone who has several years of insurance selling experience under their belt, and is going to take their knowledge and experience and insurance marketing ideas they learned and move from a captive company to a broker firm or even start their own General agency and open their own independent office. They have also been in the business long enough to generate a monthly income stream to help them make this changeover.

Here you are your own person. You pay for everything. Companies you get licensed with as a broker may charge you for their flyers, their marketing material and so on. However, you can represent as many companies as you want. You are on a true earned commission. There usually is very little help in terms of a financial training allowance or marketing help.

I have seen many agents go into the insurance agent
broker arena for the wrong reasons.

The biggest reason is that they want to carry as many different products as possible, to cover as many different possible financial scenarios. If that is your life insurance sales objective, in my opinion, you may want to reconsider.

Whats that old saying “a jack of all trades is a master of none.” That's what happens here.

Additionally you will need to try and keep up to date with schooling, training and so on with a number of different companies, etc. and when you have 15 different commission statements coming in and you try to reconcile them every month, it becomes very time consuming, among other things.

The biggest problem i had with being an Independent Insurance Agent Broker was trying to juggle all the different companies to try and make them happy. Most companies want some type of minimum commitment in terms of business. If you have a hard time chewing gum and driving at the same time, then take a hard look at going this route, especially in the early years of your insurance career.

If you are thinking about coming into the business as an Independent Insurance Agent Broker, you need to due your due diligence to make sure you are aware of the financial commitments you will be responsible for.

Insurance agents that specialize in a certain product or marketing concept will become very successful, whether a independent insurance agent broker or a captive agent.

As an example, I use the analogy of McDonald's, Kentucky fried chicken or Pizza hut. They are the leaders. Why, because they specialized in basically one product and continue to refine and define their market and stay on track.

Now look at all these big financial companies out there today that wanted to combine banking, insurance, stocks, etc. under one roof.

They wanted to be everything to everybody. And What happen, many of these big companies today are peeling off all these satellite operations and going back to what they done best. Chrysler specialized in the mini-van and then got greedy and tried to get involved in other markets by buying other companies. Now look where they are at.

My point here is that whether you become a life insurance agent broker or a captive life insurance agent , learn to specialize. Don’t try to be everything to everybody. Keep it simple in the early years.  Concentrate on developing your block of business with a lead product or concept.

I hope this  independent insurance agent broker article provided you with some insight and understanding on the various insurance career opportunities.

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