Start An Insurance Agency - Business Ideas

Updated: September 15th, 2022
Start An Insurance Agency

Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.

Are you hoping to start an agency in the service industry? How about starting your own insurance agency?

In the past decade, the insurance industry contributed more to the US GDP than banks for the first time. Insurance statistics show that the industry has been pretty good lately, and the trend is not slowing anytime soon. Factors driving growth in the insurance sector include sustained economic growth, better interest rates, and greater investment income. Besides, insurance companies adopted investments in technological and operational efficiencies during the pandemic, a move that has helped the industry thrive.

Perhaps you are an insurance agent wanting to quit a 9 to 5 job and start a new chapter of self-employment. Or maybe you are considering a career change and seeing potential in the insurance industry. Whatever the reason for wanting to start an insurance agency, it can be a great idea.

However, building an insurance agency is no small task. Ensure you have enough equity and get ready to work hard and make smart decisions.

Starting an insurance agency requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell insurance agent service, or selling insurance agent service online, you can use this page as a guide for everything you'll need to know.

Key Stats

market size
$1.2T
revenue (monthly)
$250K
starting costs
$11.7K
gross margin
90%
time to build
210 days
growth
Organic social media
business model
Subscriptions
time investment
Full time

Startup Costs

Min Startup Costs Max Startup Costs

Office Space Expenses

$0

$7,000

Employee & Freelancer Expenses

$150

$250

Website Costs

$223

$7,015

Business Formation Fees

$600

$4,700

Software Expenses

$162

$2,894

Advertising & Marketing Costs

$0

$1,400

Total Startup Costs

$1,135

$23,259

Successful Businesses

Business URL Rank

Lemonade

lemonade.com

16,229

MetLife

metlife.com

16,762

Policygenius

policygenius.com

21,151

Insure.com

insure.com

54,084

SafetyWing

safetywing.com

63,111

Premier Shield Insurance

premiershieldinsurance.com

108,754

The Hanover Insurance Group

hanover.com

118,320

AmtrustFinancial

amtrustfinancial.com

146,345

Risk Management

irmi.com

149,111

LoPriore Insurance Agency

lopriore.com

200,255

American National Insurance

americannational.com

203,970

Pros & Cons

Pros Description

Flexibility

You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.

Ability to start your business from home

It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning!

Little startup costs required

The cost to start a insurance agency costs significantly less money than most businesses, ranging anywhere from 62 to 23,259.

Rewarding work

Starting a insurance agency can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.

Scalable

With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.

No overhead costs

To get your insurance agency started, there are no costs associated with overhead, storage, packaging, etc. This will save you a lot of time and money!

Cons Description

Crowded Space

Competition is high when it comes to your insurance agency, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.

Longer Sales Process

A insurance agency can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.

Work can be inconsistent

As a insurance agency, the amount of work assigned to you and schedule tends to be more inconsistent, which may make your income less stable. It's important to set boundaries and budget accordingly based on the amount of work you plan to have.

Lack of benefits

With a insurance agency, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming.

Isolation

Often times, as a insurance agency, you typically work alone and do not have much face-to-face interaction with other team members.

Taxes

As a insurance agency, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.