The insurance industry is a sleeping giant. Working in insurance may seem boring and routinely, and to some it may even be mediocre, but it’s not. If you are interested in becoming an insurance broker, specifically an independent one, now is the best time to work your way through this career because it is in demand, and it pays considerably well too.
The skills, competencies, and requirements to becoming an insurance broker might give you a little bit of a challenge, but that is one of the best things about this career, and at the end of the road, once you become a successful independent insurance broker, the rewards are definitely worth it.
We are familiar with interacting with insurance agents, but we may not be familiar with insurance brokers, so let us first define the difference between the two. Yes, they are different. Insurance agents are those insurance professionals who act as a middle person between the insured person and the insurance company.
If you base it on their job descriptions as defined by law, insurance agents are liable in terms of administrative aspects. In layman’s terms, an insurance agent is responsible for the processing of premiums, forms and all related insurance paper works in an accurate and time bounded manner. Insurance brokers, on the other hand, are sometimes described as “super independent” insurance agents. They can offer clients a whole range of insurance products.
They are expected to be more knowledgeable and more experienced than insurance agents because they would actually need certification – a license to become an insurance broker. In the business aspect, insurance brokers are also responsible in the analysis of a business and securing correct and adequate coverage for the business.
Another difference is, if the insured buys insurance from a broker, the administrative fee or premium payments tend to be higher than those bought from insurance agents.
Different states or countries would need different licensing requirements, but for the most part, these are the following skills and competencies that an insurance broker needs to have:
- Brokerage management,
- Client service and sales,
- Industry knowledge,
- Ethics and professionalism and human resources.
These skills and competencies can be learned through formal education or trainings and some on the job experience. To start with, to become an insurance broker, you need to choose which insurance type you will specialize in.
Generally, the broker can deal with as many types of insurance, but if you focus on one expertise such as health or life or home, your goal is to become the go to broker for such insurance and will make you more competitive. Many consumers like to compare auto insurance policies for example, so setting yourself up for competition is something you could think about.
Once you have figured out your specialty, you need to start building relationships with different insurance companies. Building a great relationship with them allows you to negotiate the best deals or packages that your clients need.
And while you are working on the aforementioned steps, you need to start joining formal trainings and work shops so you can start with the next step, which is to adhere to license requirements for insurance brokers. Once you are licensed, you can start looking for prospective clients, marketing yourself and using your relationship building skills as a selling tool.