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The business model of an insurance company

The best part of starting your own insurance agency is the fact that it is not an impossible task and anyone of us with the right spirit can certainly set up their own insurance agency with of course a little basic knowledge of the insurance field. Most of us feel that insurance is a very boring topic and performing business in this field is not their cup of tea. However, once you step into this business, you will understand that it is not only lucrative but also highly interesting as well.

Every business which you undertake mainly depends on its model and building a business model for your business is just like building a book of business which certainly points to the fact of making up your client base. Clients are the essence of the insurance business and if you do not make a strong client base, it is likely that you will succeed in this venture. Clients are the significant part of the insurance industry mainly because of the fact that you get commission on every new insurance policy which is taken up by your client and not only this but you get the chance to make commission as long as your customer renews his or her policy. Insurance agents have specified commission rates for various types of insurance products such as for Personal auto which is 12-15%, for Health Insurance it is 15-20% and so on. So, in this way as you keep on making your client list you can be sure of making a residual income till the time your clients are happy with your service. There are certain step-by-step procedures to follow before you set-up your own insurance agency:

  1. First and foremost aspect is that, you need to get a license which authorizes you to sell insurance in the respective country where you are staying. There are two options of licenses which are the Personal Lines and Fire and Casualty. You can also opt for to become a Life Agent which is completely different from the other two kinds of licenses mentioned above.
  2. Make sure that you do attend a one-week course on how to handle an insurance agency which is extremely important before you set up your own business. After you finish your one-week course, you can also go in for the test and passing the test will make you an eligible contender in this business.
  3. You need to also attend to various administrative and organizational aspects such as getting organizational license and others.
  4. Thus, structuring your business model for your own insurance agency will not prove to you difficult if you set yourself onto the right path.