Guide to Starting Your Own Brokerage - Coversure Venture

Guide to Starting Your Own Brokerage

Three critical points to get right if you’re thinking about starting your own insurance brokerage

Starting your own insurance brokerage is a big step. There are many factors to think about when considering whether to start your own brokerage. It can take months, if not years, to decide whether it is the right route for you. It is not a decision that should be taken lightly. 

Generally, people who leave employment to start their own business do it for a range of reasons however these three reasons are often near the top of most people’s lists:

  • To create wealth
  • Support a certain lifestyle
  • To run a business on their own terms (i.e. freedom of being your own boss)

Setting up your own insurance brokerage is no different in this sense to any other business and these factors are often prime drivers when it comes to people moving out of employed roles to become business owners.

Increasingly, people are using networks to support them in launching their own insurance brokerages; networks play a key role in a marketplace which is becoming harder to enter; however, clarity around these points, amongst others, can often be the difference between making the right or wrong choice in terms of a network partner to work with. 

Create wealth

If wealth is a driving factor for you then clarity on the value of the business that you are building is a really important element to consider and understand when you are at the planning stage to establish a new business, ultimately, it’s one of the deciding factors as to whether all your hard work is going to be worth it.

It will also help inform you as to what level of capital you need, want, or should invest and how the correlation between investment and value could increase/decrease depending on the choices that you make. This should be an area that you fully explore to ensure you set off on the right. Clear business cases and thoroughly thought-through strategies will both be key factors if you are looking for a network to support you financially to help you establish the business.

In addition, do you have a good level of knowledge of the different factors that will influence value through your journey as a business owner, for example in insurance this is impacted by things like type of insurance, distribution routes, specialisms and niches etc, forward planning and a good understanding can maximise what you do in those early years.

Finally, if it is creating wealth, this may sound obvious, but check that it’s yours and that you can access it. Ownership of customers is often a critical point, including access to the data; be clear on this. Do you have an exit strategy? Can it be executed? Do you understand any influencing factors to this, and do key partners (investors, network partners, etc) understand this, and are they able to support you?

Be your own boss

This one is potentially the biggest one to get right, and if you don’t, you will feel this every day. It’s also quite a broad one as it can range from bigger elements such as culture or strategy and right down to individual business processes. If freedom is something that you yearn for and a real driver, make sure you understand the parameters that you will have in terms of support and opportunity and what working within a network feels like for you. To get a good feel for this engage with other network members, who are at different points of their journey to hear about their own experiences

For example, are you free to determine your own strategy? Can you choose what type of customers you work with, how you service them and where those customers are? Will it actually feel like you are running your own business?

Looking specifically at a broking business, , are you a able to truly operate as a broker? Do you engage directly with Insurers? Do you have full choice over which markets to use? Do you decide how you service your clients? If these factors are important, getting them wrong can often feel like you’ve not achieved the aim of running your own business.

Is it lifestyle or business that’s driving you?

Understanding what you are aiming to build and operate is also important in terms of the impact it will have on your lifestyle and the people around you. Assuming most people entering networks have similar levels of experience and skills, the difference between people who run a relatively modest portfolio and those who go on to build a business of scale can often come down to factors such as ambition, energy and bravery just as much as things like strategic planning and foresight on top of the strong core insurance skills that are a must.

What is important is that you have the choice to decide when you put your foot down and accelerate and when you maybe take a pause for breath to refuel and think again in terms of the next phase of development. Your circumstances will no doubt change so ensuring any model you work with can support and adapt to your strategy is a critical factor, both from a process/business support perspective but also on a personal level.

Different networks will be geared towards differing views on all of the above points, some more suited to help individuals build scale and value others more geared to models which provide individuals a safe platform to operate a smaller operation.

Making the Decision  

Taking the leap is the biggest step you will make. Starting your brokerage is not to be taken lightly. It is important to consider the options open to you and decide on what is the best route for you personally. This guide is intended to help you understand some of the different factors that you need to consider at the outset, as part of your research you should invest and commit significant time to this process and a good network partner will help you to explore the opportunity in full to make sure the right decision is made for everyone involved..  

Next Steps 

If you are considering starting your own brokerage then you are welcome to discuss your plans with us. Coversure is investing £1m into helping 15 brokers launch their own businesses in 2024. 

Backed by the larger Jensten Group, we will help you work through the options to find the best approach for you to start your own brokerage. Visit our Contact Us page and complete the form to book a confidential chat.