Thinking about going independent?

A captive insurance agent generally represents one insurance company, while an independent insurance agent can work with multiple insurance companies. This gives independent agents more flexibility in finding coverage options for clients and in how they build and operate their businesses.

Yes. Experienced captive agents can transition to independent agency ownership. However, the process varies based on your current agreement, licensing requirements, business structure, market access and other factors. Reviewing your existing contract and understanding any post-termination obligations should be an early step.

Not necessarily. Captive agents often bring significant insurance knowledge, sales experience and community relationships to independent agency ownership. However, you may need to establish a new business entity, secure carrier relationships or market access, select technology, obtain E&O coverage and build your own agency brand and operations.

Note: Every agreement is different. Consider reviewing your contract with qualified legal counsel before making decisions about your transition.

That depends on your agreement with your current company and the circumstances of your departure. Ownership of customer information, solicitation restrictions and other obligations can vary significantly. Review your agreement carefully and consider consulting qualified legal counsel before contacting customers or making transition decisions.

Note: Every agreement is different. Consider reviewing your contract with qualified legal counsel before making decisions about your transition.

Independent agencies may obtain direct carrier appointments or access markets through alliances, aggregators and market access programs. Requirements can vary based on factors such as experience, premium volume, geography and lines of business. Big “I” Alliance programs can help qualifying agencies explore market access opportunities.  Big “I” Alliance Blue is an online market access placement center which includes personal and commercial lines to specialty and hard-to-find markets. Alliance Gold unlocks revenue potential with leading national carriers.

You need a strategy for placing business, but that doesn’t necessarily mean securing multiple direct appointments before opening your doors. New independent agencies may use a combination of direct appointments, market access programs, such as the Big “I” Alliance, and specialty markets as they grow.

Startup costs vary considerably based on the agency model, location, staffing, technology, licensing, insurance, marketing and other business expenses. Building a business plan and cash flow projections can help you determine the capital you’ll need before making the transition. Whether you are sourcing funding for starting from scratch or buying another agency’s book of business, options and terms vary by experience. InsurBanc, which was co-founded by the Big “I,” is an independent insurance agency lending specialist and has been helping agencies finance their futures for 25 years. Other industry lenders and Small Business Association (SBA) loans are also options to explore.

Technology needs vary by agency, but common considerations include an agency management system, comparative rating tools, CRM or marketing technology, digital signature and document management solutions, cybersecurity protections, website and online presence. Check out the Agents Council for Technology (ACT) Guide to Service Provider Contracts to help you navigate technology decisions.

Errors & omissions coverage can help protect your agency if a client alleges that a mistake, oversight or failure to provide appropriate insurance advice resulted in a financial loss. While you may be covered under your current company’s E&O program, independent agency owners are generally responsible for securing and maintaining their own coverage. Many carrier appointment agreements and market access programs may require proof of E&O insurance. The Big “I” Professional Liability Program offers E&O coverage designed specifically for independent insurance agencies, along with a host of risk management and loss control resources.

The process generally includes evaluating your current obligations, defining your business model, meeting licensing and regulatory requirements, developing a market access strategy, choosing technology, creating a financial plan, building your brand and establishing a professional support network. Download a step-by-step starting point.

Going independent doesn’t mean doing it alone. Agency owners can find support through state and national associations, carrier relationships, peer networks and industry partners. Big “I” members have access to resources that include market access, education, E&O, networking events, technology guidance, advocacy, marketing resources, carrier contract reviews, mentorship opportunities and more.

The Big “I” and its state associations support independent insurance agencies at different stages of ownership. Resources include market access, education and technical expertise, E&O coverage, technology guidance, agency management resources, marketing support, advocacy and connections with the independent agency community.

Your state Big “I” association can help you understand resources and considerations specific to your state and connect you with national Big “I” programs. Sign up for one of our free monthly Captive to Independent Agent Zoom calls or contact your state association to find out how to join the Big “I.”