If you are currently working as a captive agent and beginning to consider that being an independent agent would offer more opportunities and income potential, this article is for you. Also, you can download our step-by-step guide. There is nothing wrong with aspirations and a desire for more income and a higher level of success. There might be some things that you’ve not considered yet. We’ll cover these things and how you can make your transition if you still want to.

The transition from captive to independent insurance agent means giving up your support system. Some insurance agents aren’t ready or willing to do this. The insurance company you are working for as a captive agent has handled most of your marketing efforts. You may not be able to take your current clients with you. Your book of business might have to stay with the company that you’re leaving.

 Insurance agents spend a great deal of time building their books of business. Can you afford to leave this book behind? That could essentially mean starting all over again. With all this in mind, becoming an independent agent might still feel best for you. If you’ve considered all the angles, let’s talk about how to make the transition as smooth as you can, ensuring that you’re set-up for success as you move your career forward.


Your Mentality Has to Change

Becoming an independent insurance agent means that you are in business for yourself. You’re no longer a salesperson; you are an entrepreneur. This position shift involves a new skillset, and you’ll need to plan and understand how to run a business on top of the skillset that has made you a successful salesperson.

You will now be in control of your office, your employees, payroll, and marketing your business. Every single detail is yours to own and control. Are you up to this challenge? If your answer is yes, let’s take a look at a start to finish plan to get you on the right path to transition from captive to an independent insurance agent.


Steps to Success

1. Negotiate for your book of business.

Try to negotiate with your current company and buy your book of business to take it with you. Taking your book of business is a definite possibility(in some cases). Iron-out and fully understand your contract’s details and any potential problems that might arise from no-compete agreements. Understanding your current contractual obligations is necessary to go forward in a way that won’t cost you anything later on. You want to start with a clean slate so that the future is 100% yours to own. If you can’t negotiate to keep your book, then have a plan to start fresh. By understanding your contract, you’ll know what an acceptable timeframe is that you must wait before making attempts to market to those previous clients again.

2. Decide how to structure your new business.

You’ll need a solid business plan, well-written and planned. Make sure you are targeting the most profitable products. Decide how you will legally operate for tax purposes. You may choose to operate as an LLC or an S-Corp, for example. Speaking to a tax attorney is your best source of information on this decision. Certain structures have more requirements for set-up but might offer you more legal protections in the event of a lawsuit or a future business closure. How you choose to structure your initial business start-up will dictate how you keep tax records and your legal liabilities for the duration of this business entity. It will also determine your personal liabilities, if any, in conjunction with your business liabilities. Choose wisely.

3. Will you borrow money or finance everything yourself?

Legally, you can loan money to your business as seed money and pay yourself back over time as long as you’ve set your business structure properly. If you don’t have the money for this or would prefer to borrow through a bank to start your business (things such as payroll, office lease, and redesign, initial marketing campaigns, etc.), you’ll need a very detailed business plan. Taking the time to put this together professionally in step 2 will pay you back dividends in this step. A bank will take you more seriously than someone just walking in without a plan. Ideas are great, but you need to articulate these plans and show expected revenues and budgets for your first three years of business. Research your business, plan thoroughly, and back it up with data. Consider paying someone to write your plan professionally.

4. Consider joining a network for independent agents.

This can give you the power you need to break into the representation of larger insurance companies that have prerequisites in place. A major insurance company, for example, will often stipulate that sales volume must be maintained at a specific level per year. By being part of a larger network of independent agents, it’s far more likely that you’ll be able to maintain relationships with these larger carriers. This will, in turn, keep you competitive in your local market. The pros and cons of joining one of these networks involve:

Cons – Fees to join, possible monthly dues to be paid, and possibly even sharing revenues from the book built while with their network.

Pros – Access to plans and companies that will attract more clients. This allows you to grow your business more quickly with fewer restrictions on the plans and companies that you can offer to your clientele.

5. Ensure that you’ve got the right technology from the start.

Captive agents have no power over this decision, but an independent agent insurance rep, you do. Have a website that is easy to read and navigate is essential. Offer free informational ebooks in exchange for an email address and other contact information. Here’s a great example of this and how to get started. This allows you to create your own sales leads. Utilize a blog to bring people to your website. A properly done blog will incorporate keywords and SEO (Search Engine Optimization) that will rank highly in Google searches and send more people your way when seeking answers to questions. By becoming the authority with answers they need, you’ll begin building their trust and engaging them in a conversation. Stay active in comments on your blogs. Independent insurance agents are not writers. Consider paying someone else to write these blogs for you and post new pertinent content each week to keep people reading and engaged. In time, a well-written blog filled with relevant information can become your best way of sourcing new contacts. Monetizing your blog can also bring you a secondary means of revenue. Most customers shop online and don’t make phone calls now. They want answers at their fingertips, and skipping this technological aspect of sales would be akin to shooting yourself in both feet.

6. Utilize technology in running your office and find leads.

Look to products like Podium to help keep your staff in touch with each other, even on the road, and keep your team focused. Remember that many contracts are won by being the first contact with a lead. Using your blog gives you a jump on the competition. Building your lists of leads is the best way to beat competitors to these clients, and using technology to help them find you easily, ask questions, and get answers in real-time is the way to impress them and win them. Real-time texting tools like Podium can help a captive agent transition on a budget to find leads. You can even get started with Podium for free today.

Being organized with lead-enhancing technology will help you beat the competitors in your area. Remember that fresh leads are premium leads and you can find them and reach them while they are still white-hot in your hands. That will produce more contracts and more revenue. That’s how you’ll be successful.

Jeffrey Child
Jeffrey Child Director of Financial Services Named Accounts

Jeffrey Child is an insurance and tax professional at Podium, the leading messaging platform that connects financial service businesses with their members and prospects.

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