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Ten Steps to an Independent Agency

We're here for your journey.

Starting an independent insurance agency can seem like a daunting task without a roadmap.  By providing a guide compiled by our own industry leaders, IIAG strives to help make your path to independence smooth and your new agency a success.

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Meet Ashley Bryant

IIAG's Member Services Coordinator

770-458-0093 ext. 110  abryant@iiag.org

IIAG makes it easy to embrace your independence.  We can help deliver business to your agency, provide effective education, and provide access to national marketing tools.  Whether it's access to the industry's leading technical experts, superior Errors and Omissions coverage, leveraging the nation's leading consumer co-brand for agents, or making sure your voice is heard by legislators and regulators - the Big "I" Georgia is here for you.

Contact Ashley for all of your membership needs, including questions on how to take the first steps toward independence.

 

Download our new agency toolkit

Ten Steps to an Independent Agency

STEP 1: THE GROUNDWORK

How to Get Started - Laying the Groundwork

Establish a realistic timeline.  Expect at least six months to arrange financing and two weeks to obtain E&O Insurance.

Obtain qualified legal advice.  If you do not have an attorney, IIAG has a relationship with an attorney who can assist. We recommend selecting an attorney with experience in the insurance industry.

Capital. You will need start-up capital for things such as office space, furniture, computer equipment, Errors and Omissions Insurance and marketing. You will also need to consider an operations and/or trust account (a trust account for client premiums).

Downloads & Links:

Start-up Budget Worksheet

Office Supply Checklist

InsurBanc - The Bank for Independent Agencies

Contact IIAG Recommended Attorney

STEP 2: THE BUSINESS PLAN

Five Things Every Business Plan Should Address

In securing company contracts, a business plan will be critical. Your business plan should address the following:

People – At its core, the fundamental value of an agency is in the capability of its people to execute its objectives.  Therefore, your business plan should include information about the people who are responsible to execute it.  At a minimum, include resumes of each of the key players that describe the professional and personal background relevant to the agency business as well as the knowledge, skills and abilities possessed by each.  For start-ups, not having a proven track record may inhibit your ability to attract prospective employees, customers and carriers.  To mitigate this uncertainty, include an explanation of who you know and how you may be recognized in the community and/or industry.

The Opportunity - A key to agency success and of interest to all current and potential stakeholders is how the agency plans to acquire customers, including competitors. This section should demonstrate that you know who your customer is, what your products and services are and how you will position your products and services over those of your competitors.

The Business Environment - Your business plan should demonstrate that you have a keen awareness of the external business environment in which you operate, that you understand its impact on your business prospects and how you will navigate and exploit it.  The discussion should encompass regulation, the economy, labor supply, customer markets, suppliers, competitors and in what way the status of these factors is relevant to the operation of your agency.

The Risks - Many business plans, especially those that will be used outside the agency to attract stakeholders, often make the mistake of painting only a rosy picture; however, risk is inevitable. The best business plan readily identifies and confronts the risks to be faced. Potential stakeholders, especially prospective carriers, will develop confidence in those agencies that acknowledge the risks and provide strategies to resolve them.

The Numbers - You need to have realistic expectations of where revenues will come from and when and how cash will be utilized. Insurance carriers will be interested in growth projections.  At a minimum, you should have a start-up budget, a cash flow forecast and a production forecast.

Downloads & Links:

Business Plan Outline for a Start-Up Agency

Cash Flow Budget Worksheet

Annual Production Calculator

STEP 3: LEGAL CRITERIA & ERRORS & OMISSIONS INSURANCE

Licensing, Registration, Tax ID, etc. - Meeting Legal Criteria

Choose an Entity. There are three broad categories to investigate when determining your business organization: Sole proprietorship, partnership, and corporations.  While a sole proprietorship is the least expensive and easiest to create, it can carry a risk of personal liability for the owners. Taxes may also be a consideration. We recommend seeking legal and tax advice.

Georgia Create or Register a New Entity

Federal Tax Forms and Filings: Sole Proprietorship, Partnership, Corporation, LLC

Find my Georgia E-Verify Number (This will be critical in obtaining your local business license.)

Obtain Licenses. You need to be licensed in order to sell insurance. You will be required to take a certain number of hours of training as well as sit for a licensing exam. In most states, you will need a license for each type of insurance that you wish sell. Pre-licensing, licensing and continuing education are state specific so if you intend to sell to clients in multiple states you will need to consider the requirements in each are you choose to do business in. The rules on the sale of insurance and consumer protection information can be found at National Association of Insurance Commissioners. Sole proprietorship, partnerships and corporations are required to obtain a resident insurance agency license.

Georgia Agent & Agency License Forms

Residency Agency License Forms

License your Agency & Producers

Apply for Errors and Omissions Insurance. Insurance companies will require you to obtain Errors and Omissions prior to appointments. Your business plan will be extremely helpful in securing E&O coverage because they will not have the history on the books to underwrite, so they will underwrite you, as the owner, and your goals for the agency. IIAG members have multiple options from A+ rated insurance companies. Additionally IIAG membership includes access to the E&O Happens website, an exclusive comprehensive risk management website that includes practical information and tolls to help your agency avoid E&O claims and receive free consultation on best practices each quarter.

Downloads & Links:

Information on IIAG Preferred Carriers

Start the E & O Application

Sample Policy Form

E&O Loss Control Seminar Online

STEP 4: ACCESS TO INSURANCE MARKETS

Secure direct appointments with insurance companies as well as wholesale relationships

Although direct appointments are ideal in the early stages, there may be a need to work with wholesalers as well as other indirect access points to insurers. You will want to prepare an appointment package which consist of copies of your agency license, producer licenses, E&O Declarations page, bank accounts (trust and operating), flood certification if applicable and voided checks.

IIAG members receive immediate exclusive access to Insurance companies through the following:

Independent Market Solutions (IMS) is an agent-centric market access program owned and operated by Big “I” State Associations that offers commercial and personal lines products with low volume commitments and offers a pathway to direct appointments with several insurance companies.

Big “I” Markets (BIM) is a market access program owned and operated by Big “I” National Association that offers commercial and personal lines products with little to no volume commitments via Auto and Home Standard Markets and Eagle Agency. Additionally Big “I” Flood helps deliver members an unparalleled flood program.

IIAG Partners in Progress was created for Insurance companies, wholesalers and vendors that wish to gain exposure to IIAG members and support the Association. IIAG Partners in Progress consists of over 100 companies, such as Safeco Market Access Program through GAMS, looking to help Georgia's independent insurance agents achieve more collectively that they can individually.

Market Aggregators - Market aggregators provide assistance to new agents in setting up their first agency office, access to otherwise unattainable markets and niche programs, the opportunity to obtain direct company appointments and a chance to share in the networks profitability.  In return, these networks usually ask agents to pay a percentage of commission, a membership fee, or require them to give up a small stake in the value of the book of business built up through the aggregator.  Be sure to review the contractual relationship with these entities carefully, especially as they relate to book ownership, commission or revenue sharing and exit costs.

STEP 5: AGENCY MANAGEMENT SYSTEM & PROCEDURES

Framework for the Necessary Business Processes 

Choosing an Agency Management System (AMS) can be critical in securing live time information from insurance companies and in servicing your clients. These systems may allow you to develop work flows to help with client renewals and live feeds to insurance companies all while updating applications and keeping your files current should a client contact the insurance company directly.

The costs for these systems can vary greatly as can the ability to customize for your specific needs. Agency management software can range can average in cost from less than $1,000 to around $5,000 for a startup operation with monthly fees of $60 to $600 depending on the number of users. You will find vendor comparisons for both hardware and software and checklist to be used in making your decision which will help maximize productivity and profitability.

During the implementation process you will be asked to set up a chart of accounts along with several other important structural divisions inside your Agency Management System. With this in mind you want to make sure the system fits your agency.  Should you need help with your chart of accounts, IIAG can help with a general template.

IIAG members receive discounts through Vertafore which provides insurance management systems built for your business. IIAG members also have exclusive access to Agents Council on Technology (ACT) which is an organization made up of independent agencies to offer resources in selecting the right Agency Management System.

Workflow Procedures – One of the best ways to avoid a costly mistake is to create and develop a Policy and Procedures Manual for your agency.  A clear workflow agency process will help your new firm consistently handle renewals as well as policy changes and claims throughout the year. IIAG has partnered with The Moberg Group, a leading insurance agency consulting firm, to help agency members develop procedures according to Best Practices at no additional cost.

Downloads & Links:

Top 10 Reasons to Use an Agency Management System

STEP 6: BRAND YOUR AGENCY

Use the Internet and Social Media to Enhance Your Agency's Visibility to Others

Developing a Website will be your launching point to reach consumers, tell your unique story and highlight the value of your agency.

IIAG has recommended vendors and discounts for logo design, website development, and hosting through Titan Web Marketing Solutions.

Should you already have a website, IIAG members receive a free Digital Review, which provides a one-on-one consultation and detailed report on how you can improve your existing website and social media outlets.

Marketing - Establishing a plan that incorporates social media and digital advertising will enhance your agency’s visibility in your local community.

Trusted Choice is the National Brand for Independent Agents. Trusted Choice can help amplify your local marketing and gain access to referrals by offering a variety of logo options, campaigns and as an added bonus Trusted Choice will reimburse a portion of your marketing expenses for co-branding!

Referrals – IIAG members receive a free profile on TrustedChoice.com where consumers can search for local independent agents in their area and begin the online quoting process, which can drive additional business to your agency.

Downloads & Links:

TrustedChoice.com Services for Agents

Agents Council for Technology - Internet Marketing

STEP 7: TRAINING AND CONTINUING EDUCATION

Obtain Additional Training Technical, Management, and Industry

Licensees in Georgia must complete 12 hours of CE every two years in the line for which the license is held with at least 1 hour in ethics. (Licensees holding multiple authorities Life & Health and Property & Casualty must complete 24 total hours with 50% of the hours in Life & Health and 50% of the hours in Property & Casualty courses -- this must include 2 hours of Ethics training).  Credit earned from general courses is acceptable in meeting Life & Health or Property & Casualty requirements.

IIAG offers our members an opportunity not only to complete these required hours, but also to obtain professional designations in the process.

Downloads & Links:

New Agent Training

Virtual University

Insurance Licensing

IIAG Principal's Academy

AAI Designation

ASCR Designation

STEP 8: RECRUITING, TRAINING, & MANAGING THE RIGHT TEAM

Whether it is inside service staff or sales staff, your reputation will only be as good as your people and IIAG has resources to help.

Recruiting and Hiring

Big "I" Hires - A one stop resource to find, attract, assess and hire top performing Service Staff and Producers.

WAHVE Remote Staffing

Caliper & Omnia - Personality profiling tools

Employment Contract - Available for IIAG Members

IIAG Job Board - Complimentary job postings for IIAG members.

Training and Managing

Sales Call Reluctance Testing

Customer Service Phone Training - Trusted Choice

STEP 9: NETWORK

Developing the Relationships you need to be Successful 

Attend an IIAG Event and get involved

Agency members who attend IIAG events cite the relationships that they've built with mentors, carriers, and other Big "I" partners as some of the most important connections they've made in their career.

Identify and attend local events in your community

This can be done in a variety of ways: through membership in your local Chamber of Commerce, by joining a civic organization such as Rotary or Jaycees or by becoming active in your place of worship.

STEP 10: JOIN IIAG

Membership in the Georgia Association of Insurance Agents offers the new agent not only access to Errors and Omissions coverage, Association Health Plan, Market Access ProgramsPolitical Advocacy, and a variety of other member benefits and services, but it also makes you a part of a family of other Independent Agents throughout the state.

Memberships start as low as $47 per month and varies by employer count.

Questions?

Questions?

Contact Ashley Bryant

IIAG's Member Services Coordinator

770-458-0093 ext. 110

abryant@iiag.org

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