What Is An Independent Insurance Agency?

1. Having an Independent Insurance Agency Advantages and disadvantages of having one with a franchise model

2. Introduction​ • Customers usually have little to no idea of what insurance they should purchase, and look for expert advice • A 2020 Small Business Risk Report says 72% of small business ownersbelieved that advice from an agent is vital to their insurance decisions • Advices from agencies become even more important to clients when it comes from agencies who offer more choices • So, you need to have an insurance agency to have good independent insurance agents

3. What is a Franchise model? • Is an agency model that allows you to have your insurance agency and grow your book of business as much as you want • The franchisers will provide all the operational assistance • It will associate your agency with a well established brand that adds to the company’s goodwill

4. How does a Franchise Model work • There is a franchiser fee that the franchisers take from the insurance agencies • In return, they have to give all the operational assistance that an insurance agency needs • But, a 2-year non-compete clause might bring end to the agency and both parties decide to stop working together

5. Pros of working with a Franchise Model • They take care of the operational assistance • Even if there is an already established business, you can have every access to it • It would be better is the business is a profitable one already • There is no stress of starting your business from scratch • It saves time and you can have a well established business fast and easy • You can grow your book of business as much as you want

6. Cons of Franchise Model • The franchiser fee is expensive • If you want to own a profitable business, it is even more expensive • All the problems of the previous owners come to you • Has a non-compere clause and doesn’t give insurance agents more room to grow • The fees include: trustworthy branding, operational aid, lead generation services, and technical assistance • A 2-year non-compete clause may bring your agency to an abrupt end

7. Things to take care of • Measure the pros and cons and recognize what works best for you • The amount of fees should depend of your level of affordability • Having zero experience will lead to business failure as not everything is handled by the franchisers • If the profit is high and you have necessary knowledge, it is good to use this agency model • Make sure you are aware of other agency model before choosing this completely