Becoming An Insurance Broker: Is It Right For You?

If you're a people person with a knack for sales, becoming an insurance broker could be a rewarding career choice. Insurance brokers act as intermediaries between clients and insurance providers, helping clients find the best insurance policies for their needs. It's a stable, recession-proof career choice, as people always need insurance. In this role, you'll get to help people through challenging periods in their lives, such as accidents or robberies, by guiding them through the claims process.

To become an insurance broker, you'll need to complete certain education and training requirements, pass licensing exams, and gain practical work experience. While it can be stressful and challenging, it's also an exciting and rewarding career path.

Job satisfaction and pay

Job Satisfaction

An insurance broker helps clients select insurance coverage that best fits their needs. They can work independently or through an organisation and are not employed by insurance companies, although they do communicate with them.

One of the most satisfying aspects of being an insurance broker is the feeling of helping others find the right insurance plan at the right price. Your work can make a difference in whether a client can get coverage and protect their future health and financial security.

However, the job also comes with challenges. For example, insurance brokers need to meet sales targets, which can be stressful. This pressure often leads to long working hours, high-stress levels, and the need to stay updated with market trends and customer preferences. Managing client expectations can also be difficult, especially when dealing with complex claims or policy issues.

Pay

The average salary for an insurance broker in the United States is $90,724 per year. Earnings vary by broker and region. For example, in California, insurance sales agents across all experience levels had an average mean wage of $77,700 in 2017. In the Oakland-Hayward-Berkeley, California, metropolitan area, the average mean wage was $111,790.

Insurance brokers typically earn a commission on each policy they sell. They may also charge a broker fee for their services, which is paid by the insured. The commission amount varies based on the policy and company and is typically calculated as a percentage of the premium.

Some states have fee restrictions for broker fees. For example, in Florida, broker fees are capped at $35. In some states, if you charge a broker fee to one client, you must charge the same fee for similar transactions for every client.

Career progression

There are several paths you can take to become an insurance broker. You can take a degree in a relevant field, such as business, economics, or finance, and then complete on-site training to learn about insurance policies, regulations, and sales techniques. Alternatively, you can take a higher apprenticeship, which combines workplace learning with study.

Once you have the necessary education and training, you can gain experience through entry-level positions such as customer service representatives or sales agents. With hard work and dedication, you can advance in your career and become a fully licensed professional.

As an insurance broker, you can work independently or as part of an insurance brokerage firm. You can also choose to specialize in a specific type of insurance, such as life insurance or group health insurance plans.

With experience, you can move into account handling, claims broking, or business development roles. You can also progress into management or move into other types of insurance work, such as loss adjusting, underwriting, or compliance.

There are also opportunities to pursue continuing education and obtain additional certifications to further your professional development and job prospects.

The importance of sales skills

Sales skills are crucial for insurance brokers, as they are responsible for selling insurance policies to clients. The ability to introduce yourself to potential clients, inquire about their insurance needs, and close deals is essential for success in this career. Here are some reasons why sales skills are vital for insurance brokers:

• Income and Commissions: Insurance brokers are often compensated through a combination of base salary and commissions. Commissions are typically based on the premiums generated from the policies they sell. By honing their sales skills, brokers can increase their earnings and income potential. Successful brokers who can build strong client relationships and consistently meet sales targets can earn higher incomes.
• Client Acquisition: Sales skills are essential for attracting new clients and expanding your client base. Insurance brokers need to be comfortable approaching potential customers, assessing their insurance needs, and offering suitable policies. The ability to prospect for new clients and generate sales is crucial, especially when starting in the industry, to provide a decent income for yourself.
• Relationship Building: Strong sales skills enable insurance brokers to build and maintain relationships with clients. By understanding sales techniques and relationship-building strategies, brokers can better connect with clients, address their concerns, and secure their trust. Effective relationship management is key to client retention and repeat business.
• Addressing Objections: Sales skills involve learning how to handle objections and address clients' concerns. Brokers need to be able to listen actively, understand clients' objections, and provide tailored solutions that meet their unique needs. This aspect of sales is crucial in building trust and ensuring client satisfaction.
• Industry Knowledge: Developing sales skills also entails gaining in-depth knowledge of the insurance industry and its products. Brokers must familiarise themselves with various insurance types, such as auto, home, life, and health insurance. By understanding the features, coverage options, and exclusions of different policies, brokers can make informed recommendations to their clients.
• Competitive Advantage: The insurance brokerage field is competitive, and strong sales abilities can set you apart. Employers often seek candidates with excellent sales skills, as they are crucial for generating business and increasing revenue for the brokerage. Demonstrating proficiency in sales can enhance your employability and career prospects.

In conclusion, sales skills are of paramount importance for insurance brokers. They empower brokers to connect with clients, offer tailored solutions, and drive business growth. By cultivating strong sales abilities, insurance brokers can increase their earnings potential, build meaningful client relationships, and establish a successful and rewarding career.

Qualifications and licensing

The qualifications and licensing requirements to become an insurance broker vary across different states and regions. However, there are some commonalities. In terms of qualifications, most states only require a high school diploma or GED, although a college degree in a related field such as insurance, business, economics, or finance is advantageous. Some states, like California, require fingerprints and a background check, while others may have additional criteria such as no fraud or felony charges and no past-due child support.

To obtain a license, aspiring brokers must meet the pre-licensing requirements of their state, which often include specialized coursework and passing an examination. The Series 6 or Series 7 test offered by the Financial Industry Regulation Authority (FIRA) is commonly accepted. Some states may also require a broker bond, which is a type of surety bond that holds brokers accountable and protects the public from potential fraud.

It is important to note that the requirements may differ based on the type of insurance being sold. For example, accident and health insurance, property and casualty insurance, and travel insurance may have distinct licensing needs. Additionally, selling insurance in multiple states will likely necessitate obtaining a license from each state.

Most states also mandate continuing education courses for insurance brokers to maintain their licenses. Voluntary certifications are also available for those seeking to advance their careers and enhance their professional development.

The role of an insurance broker

Brokers are responsible for staying up to date with insurance rules and regulations, delivering excellent customer service, and providing accurate advice. They may also help clients file insurance claims.

The day-to-day duties of an insurance broker include:

• Providing advice on client risk
• Renewing and amending existing insurance policies
• Creating reports to present to underwriters
• Conducting research on market trends
• Developing and maintaining client relationships
• Negotiating with underwriters to get the best insurance prices for clients
• Assessing insurance claims to ensure they are complete
• Explaining policy details and conditions
• Meeting with clients and determining their insurance needs
• Providing advice on risk management
• Assisting clients with signing policy agreements

Insurance brokers need to be comfortable speaking with clients and have strong communication skills. They must be able to ask relevant questions, listen actively, and build trust with clients. In addition, brokers should enjoy sales and be able to prospect for new clients.

Frequently asked questions