Posted by Everything that works does for a reason. The same is true for exceptional brokers. Becoming a good broker does not happen by chance. There is no such thing as being consistently lucky, but putting in a set formula and getting the same good result is predictable and expected.
The good thing about insurance, like every other thing, is that you can generate the same result if you follow the same steps. This is why we have written this article to give you ten steps to being a good insurance broker.
With the right information you can be as good as the the best broker you know out there. We have done all the research for you. Enjoy!
To give you a proper understanding, let’s begin by trying to understand who an insurance broker is.
Table of Contents
Who Is An Insurance Broker?
An insurance broker is the middleman between a consumer and an insurance company. They exist solely for the customer. Their job description includes getting the perfect insurance policy to suit their customer’s needs.
They do not sell insurance directly, rather they connect the consumer to the right insurance company and receive a percentage of the premium ad commission if the consumer purchases the policy. Commissions can range from 2-8% depending on state regulations.
Types of Insurance Brokers?
There are two major types of brokers. Let’s discuss them quickly:
- Direct Brokers
- Reinsurance Brokers
#1. Direct Brokers
These are directly licensed by the IRDAI. They are directly involved in getting insurance coverage, providing claim consultancy, and offering management services to consumers for a fee.
Direct brokers have an overview of the insurance market, so they can negotiate claims, and insurance policies and provide advice to their potential consumers as regards their prospective insurance policies.
#2. Reinsurance Brokers
Reinsurance brokers are different from direct brokers because they sell and negotiate reinsurance policies for insurance companies.
They negotiate first with big insurance companies to sell reinsurance to the companies they are representing.
The Difference Between Insurance Brokers and Agents
Without the right information, you can easily interchange the two positions. But they are not the same. Insurance brokers represent the consumer/client or company that they are negotiating insurance policies for.
They have no particular affiliation with any insurance company, and they only try to get the best deals for the clients and companies they represent.
Agents do the opposite, depending on the kind of agent, they work to sell insurance policies to customers and companies, sometimes even brokers. Agents are obligated to sell only the insurance of the companies they represent.
How Do Brokers Make Money
We’ve already told you that brokers make their money through commissions. But you may not know how this works. Brokers make money through the premiums paid by customers to their chosen insurance company.
Brokers get a percentage of the premium paid to the company. They can also make some money by providing extra consultations and advice to their clients.
10 Steps To Being A Good Insurance Broker
Here are ten sure steps to becoming a good insurance broker:
- Obtain the necessary license
- Know about your products
- Learn about people
- Develop strong communication skills
- Cultivate relationships with your clients
- Maximizing technology
- Have a growth mindset
- Be honest with people
- Treat each deal like a first
- Have a wide product range
Let’s talk about each point
#1. Obtain The Necessary License
To be a broker, you must first be above 18 years of age. You must also not have any criminal record. For the more complex requirements, the state has some laws that decide how many hours one must out for each line of brokerage.
It is also helpful if one has a degree. A diploma is required at the very least. Several brokers participate in the Series 6 or Series exams of the 7 Financial Industry Regulatory Authority (FIRA).
#2. Know About Your Products
After the creator of the product, you should be more knowledgeable than anyone else about the product(s) you’re selling. Although you’re not representing the company directly, you are still to some extent the face of each company that you market their policy to your consumer.
Having adequate information — enough to give to the consumer— will give them peace about whatever product they settle for. This means that knowledge about your products will benefit all parties involved.
#3. Learn About People
This shouldn’t be so difficult, but most people find it is the hardest to do. As a broker, your job is to understand how people feel, knowing exactly what they want even when they don’t say it out loud.
Then looking for the product that best answers their needs. The key to doing to to doing this is knowing what people are looking for with insurance and to serve as as a middleman to get it.
#4. Develop Strong Communication Skills
The ability to communicate effectively is very important to you as a broker. On every front, it ia important thattyu know how to communicate first hit with your client in order to understand their needs, then with the different insurance companies that you are working with.
If you have a problem with proper communication skills, you are likely to never succeed as an insurance broker.
#5. Cultivate Relationships With Your Clients
A regular broker sees each client as dimly a means to earn a commission and nothing more. But a good broker thinks otherwise. Good brokers know that forming the necessary cord of friendship with a client simply secures that client and all other individuals that could be attached to the person one way or another.
We do not imply that you should develop relationships simply to take from your clients, but these could be added benefits.
#6. Maximize Technology
Although there are thousands of brokers around in the world currently, statistics show that at least 40% do not have a website. If you’re looking to be a good broker, then you cannot be part of that statistics. Setting up a website is the first thing to do in order to take advantage of the tech.
Go the extra mile to make your interface user-friendly. Current consumer trends in the insurance industry show that consumers prefer to do stuffsby themselves now. For example; getting quotes, purchasing policies, filing claims etc. If you have all these in place, you will be at a great advantage.
#7. Have A Growth Mindset
This is true for you as an individual and owner of a brokerage firm. Every point made so far will not be useful to you if you don’t have a mindset that is constantly open to possibilities.
If you find out that you’re not doing something tight, and it is affecting your company’s productivity, you have to be ready to make changes on yourself as an individual. This could be in respect to your attitude and behavior towards your clients.
It would help if you also kept an open mind about how to run your firm. No matter the size of your firm and the number of employees, you will always need to adapt to changes to experience growth. A good broker, like a good leader, knows this.
#8. Be Honest With Your Clients
Honesty is becoming a rarity, yet people look for it in their day-to-day activities. If you are able to bring honesty every time you start a deal, in no time you will be sought after.
Being honest with your clients requires you to do your research properly in order to give them the adequate information for every policy that you are marketing.
It also means being sincere enough to let them know not just the advantages of each plan, but also the disadvantages. You should strive to have a reputation for being honest, then you won’t have to sell yourself!
#9. Treat Every Deal Like A First
This might sound absurd until you do some reflection. Remember how you prepared for the first client you got? That is the energy and dedication that is required for you to be a top notch broker. Simply put, always bring your A-Game to the table.
Do your homework and let your clients know that they are a priority always. The rest will sort itself out.
#10. Have A Wide Product Range
Being ablel to offer a range of product lines to a client all at once easily makes you a good broker. Since customer satisfaction is key to a job well done, your ability to provide your cleints with several options; life, property and casualty, homeowner, auto, flood and perhaps specialty insurance put you on a whole new level.
It could be not easy to get the license to cover different product lines, but if you are able to do it, you can easily stand out as a good broker.
Frequently Asked Questions
[sc_fs_multi_faq headline-0=”h3″ question-0=”Do I need a college degree to become an insurance broker?” answer-0=”No, you don’t necessarily need a college degree, but most brokers have at least a high school diploma. However, some brokers may have degrees in related fields, such as business, finance, or risk management.” image-0=”” headline-1=”h3″ question-1=”How much do insurance brokers make?” answer-1=”Insurance broker salaries can vary widely on experience, location, and specialty. According to the Bureau of Labor Statistics, the median annual wage for insurance sales agents (which includes insurance brokers) was about $51,480 in 2021.” image-1=”” headline-2=”h3″ question-2=”How do I get clients as an insurance broker?” answer-2=”Building relationships is key to getting clients as an insurance broker. Networking, referrals, and advertising are all effective ways to find new clients.” image-2=”” headline-3=”h3″ question-3=”Can I work as an insurance broker remotely?” answer-3=”Yes, many insurance brokers work remotely or have a hybrid work schedule that combines in-person and remote work. With technology, it’s easier than ever to conduct business from a distance.” image-3=”” headline-4=”h3″ question-4=”What types of insurance can I sell as a broker? ” answer-4=”You can sell a wide variety of insurance products, including life, health, auto, property, liability, disability, and more. The specific types of insurance you can sell will depend on your licensing and training.” image-4=”” count=”5″ html=”true” css_class=””]
Important Recommendations
- 19+ Largest Insurance Brokers in Canada
- 10+ Biggest Insurance Brokers in the World
- 19+ Top Reinsurance Companies in the World
Conclusion
Getting started or even expanding, can be quite overwhelming to you as a broker. But getting the right information solves half the problem.
We hope you have an idea of what to do now. Let us know how this has helped you in the comment box. Also, we would like to get any suggestions or recommendations you might have.
Thanks for reading!
Bye!