Nigeria is coming to terms with the fact that insurance is a viable alternative. Health insurance for one is blossoming. You can tap into the industry and start an insurance agency in the country. It is important you know you can start an insurance agency as an independent fellow without any government interference.
So, if you want to go through the journey of starting an insurance agency, you are on to something great. I tell you really. You will make it with the right guidance. You should just read on.
Running an insurance agency is one of the business opportunities of the insurance industry and it is profitable. This is a good alternative business especially for those interested in profiting from the insurance company.
You should know that insurance companies market their products through three major channels. They are as follows:
- Direct sales
- Independent Agents
- Captive agents
I will explain sales through captive agents and independent agents as direct sales are the normal sales you and I know.
Captive agents are insurance agents that have ties to one specific insurance company and only sell the company’s products. He makes all his money from that company in form of salaries or commissions or sometimes both. You will have to choose to work as full-time or part-time employees of the company.
Independent agents on the other hand are not in any way tied to any specific insurance company but work on their own. They sell insurance products of several insurance companies.
The independent agent is responsible for setting his business up. He provides the capital for his business and is also responsible for all business expenses.
Without wasting your time, below are the steps you should take when you want to start an insurance agency-:
How to start an insurance agency in Nigeria
Determine the kind of agency you want to start
Before you can start an insurance agency, you will have to decide if it will be captive or independent agency you want to start.
To become a captive insurance agent, an application will have to be made to the company and it is granted, you will undergo some form of training to learn about the products and other things about the company.
Decide on the kinds of products you would sell
If you make a decision to become an independent insurance agent, it is still okay. All you have to do is decide on the products you would sell that will be favorable to you.
You choose from the following categories; include car insurance, health insurance, annuity products and house insurance to mention a few.
Register and incorporate your insurance business
When you have decided on the kind of insurance agency you want to run, the next thing in starting an insurance agency is register your business. It has to be incorporated as a limited liability company.
Obtain all necessary license and permits
This is an extension of the registration process. You are expected to go ahead to find out what the requirements of running an insurance agency business are in your state. Some states may require you to write and pass some specific examinations before you can start your insurance agency. It is of essence that you find out what the requirements are for the state you want to operate in and comply with it if you want to start an insurance agency.
Ensure you have a clean criminal record
You have to ensure your record is clean before you start an insurance agency. This enables you get the license as at when due. They go through police records before granting the license. You should ensure you are clean.
Ensure you are of the appropriate age
Minors are allowed to start an insurance agency. Ensure you are 18years and above. Only persons who are 18 years and above are allowed to start an insurance agency, so you must ensure that you are at least 18 years old before you apply for an insurance agency license.
Obtain professional liability insurance
As an insurance agent, you would be needed to obtain an insurance policy known as the errors and omissions insurance.
Write your insurance agency business plan
The importance of business plans cannot be overemphasized. You should write one when you want to start an insurance agency in Nigeria.
Get companies to work with
Look for insurance companies whose products you would market. Remember that you may need to register under more than one company as an independent agent.
Build your team
A team is always a necessity. As an insurance agency, you can also build a team of other insurance agents who would work with you and for you in your own insurance agency. This could be part-time or full time workers who you would pay commission on any deal they are able to close.
Advertise and Market your business
You are not complete until you have a way to market your products. When you start an insurance agency, you have to find a way to market it. You can start by creating a website for it. It makes you legit and serious. Then follow other online and offline advertisement and sell your products.
Work on referrals
When you start an insurance agency, to be able to get people buy your products, you might want to introduce a referral package. People who bring other people to buy insurance products for you will be rewarded.