Insurance Broker Occupation
People generally understand that insurance helps protect them and their assets from the unexpected. All it takes is a bad accident, a wrong decision, or ill-intentioned party to trigger a lawsuit and bring someone to bankruptcy. However, even when talking to an insurance company, the initial discussion is with a sales agent just selling the products of that company.
Insurance brokers, however, work for themselves. They connect the right insurance market product with the right client rather than just pushing a pre-determined set of insurance products. Because brokers have this independence, they can work with multiple companies to sell products as well has have insurance sales agents working for them.
Many brokers run their own office, expenses, revenue, and staff. As such, they also have to keep track of the office’s related tax reporting as well as the business strategy. For legal protection, many brokers form a corporation, even as a small business, to separate their personal assets from their business in case of legal liabilities.
For the business looking for insurance products, the broker acts as a mediator and deal-maker between insurance companies and the business client. Because the business is looking for a specific product, many times tailored to what the business specifically needs, the broker provides a valuable service swimming through the entire market for the right product match.
Successful brokers manage their access to insurance companies’ products like a veritable library. Because of their familiarity brokers can quickly package an insurance coverage situation that works well for both insurers and clients. As an added benefit, the broker’s services have no charge up front. Instead, brokers recover their charges as a commission paid by the insurance company actually providing the insurance product.
Finally, smart brokers can think ahead and find insurance products for issues a client may not have thought of right away. This up-selling or upgrading works well for all involved since it helps protect the client better and it sells more or better product for the insurance company.
While all brokers advertise their services through traditional means when necessary, many brokers receive their best business through referrals and word of mouth. Friends will connect others with good brokers and business managers will share valuable broker assets with each other through networking. As a reputation builds, referrals add more and more business to the broker.
On the legal side of things, an insurance broker must actually have a state license to operate as one. Such regulation is regularly administered by a state agency, usually a state insurance commissioner and related agency. Brokers must have spent time as insurance agents first and must also complete specific financial courses to be eligible for licensing. Only when the prerequisite criteria is met, then the broker-to-be can take a state exam to actually obtain a broker’s license.
Insurance brokers are then required by state law to maintain their license through regular professional education requirements that must be documented as met. Such courses are typically tracked by registration with certified courses of continuing broker education.
It’s quite common for insurance brokers to work a particular area of insurance rather than trying to cover all the bases possible. Since insurance can range from health, to business, to auto, to home, there are a variety of niches a broker could cover in his area without running out of options.
According to CNN and Money Magazine, insurance brokers earn very successful salaries as an occupation category. By the time a broker is established, the average salary can return approximately $115,000 annually, with high earners bringing in close to $275,000 a year. Much of the earning power comes from commissions in selling insurance. As long as the client maintains the sold policy, the broker continues to earn commission on old deals as well as new ones just brokered. With success comes more referrals by reputation, thereby bringing additional business and commissions in sales.