So, the FCA has finally granted you permission to start trading but before you write your first case, you’ll be approaching an agency base. This will either be direct to insurers or via wholesalers.
Below are our 5 top tips on doing this best:
1. Keep your agency base small to start off with
Every broker wants strong relationships with their partner insurers and when you are starting out it’s tempting to open as many agencies as possible. This may help short term, but in the longer term could result in insurers citing ‘lack of support’ and closing the agency down. It’s better to take your time and form long-lasting partnerships.
2. Personal guarantees
You are likely to be asked to provide one for many of the main insurers. This unfortunately is standard and whilst you should be very cautious of giving personal guarantees, insurers have the legitimate right to protect their sums of money that are held under risk transfer.
3. Completing forms
It’s hard work, and it’s amazing that the industry does not have a standardised agency form yet, but this is the reality of applying for agencies. Make sure you clear plenty of time to complete this administrative task.
“At the Movo Partnership, we support new start up insurance brokerage with more than just a trading platform but also with good advice and lending support when needed”.
4. Wholesalers’ v’s Direct Agencies
Obviously, no one wants to share their commission with another broker but often, in the early days, it pays to have a good relationship with a wholesale market that can give you some buying power.
4. TOBA audits
You should be carrying this out periodically but invariably this can take a back seat in a buy new brokerage. Make sure you try to fit this in as it’s a requirement.