Referral - consultant to start an insurance brokerage

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Referral - consultant to start an insurance brokerage

Post by AJ1 »

Do you know of a consultant who could advice a business owner on how to become an insurance broker? Or do you have advice?

The circumstances are that there is an existing business whereby business customers constantly buy property and liability insurance. They would prefer to buy this insurance from the existing business, but the business is not licensed.

What would it take for this business to become licensed in New York and California? Could the business hire someone whom is already licensed and then file for the business to be licensed? Or does an owner need to also be licensed?

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Re: Referral - consultant to start an insurance brokerage

Post by MBRCatz »

The direct answers to your questions are: If you're willing to pay enough, someone in your state will walk you through it. I'd guess $200 an hour would get the job done. First you get licensed in your home state. Then you get the "nonresident" license. Depending on your home state, it can be as easy as passing a competency test and background check.

No, you can't hire an 'employee' and borrow their license to get a license for your business. A principal of the business must be licensed. Unless you make that employee an owner/officer of the business, it won't work. And when they go - you have to get a replacement to keep your business licensed.

Are you willing/able to pay the tens of thousands of dollars to a consultant, and jump through the licensing hoops (which will require to pass competency tests) to get licensed, and to teach you all about this business? Are you prepared to buy the insurance coverages needed for your business to get an appointment? Do you have insurance companies willing to sign you up to let you sell their insurance products (the most difficult part, especially if you are new, and this is not your main business)? AND you're able to pay someone who knows what they are doing the salary required, to write and service the business?

Can you sell enough policies to justify the cost? Is the existing business such a type that regulators would refuse to also sell insurance products?

If you didn't have a business already, I'd suggest the best thing for you to do is get your license and go work for a broker, and learn the ropes. New brokers work 60 to 80 hours a week selling business, if they want to succeed the first few years. Outsiders looking in, think there's not much too it - that's a mistake. It's a lot of hard work.

No insurance company is going to let you sell their product, unless you have a business plan to sell at least $250,000 worth of policies the first year. Most will want double that. It's probably going to be easier and cheaper for you to just keep referring out to someone else.
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Re: Referral - consultant to start an insurance brokerage

Post by mccluney »

Hey there is a lot of truth in what Catz is saying. You also might wish to talk to a few insurance agents. What you are trying to do is difficult with no knowledge of the insurance business. I cannot imagine doing what you are attempting to do. Buy a lottery ticket instead.
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Re: Referral - consultant to start an insurance brokerage

Post by RMCKIN »

I believe there could be a couple of ways to accomplish this. You could make contacts with a few successful Brokers in the States you want to work in. They would more than likely offer various proposals to either finance your startup or offer you an equity position in the firm. With a reputable Broker, they can help you with licensing and education. They can also make sure that all of the Insurance Laws are being followed.
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Re: Referral - consultant to start an insurance brokerage

Post by pageltd »

email me. i can help.
George Page
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