New insurance brokers
Discussion
I want to open my own insurance brokerage (niche motor). If I solo and start for myself it would mean risking everything which I do not want to do (savings and house). This also takes a very long time to get authourised and agencies.
If I join a network it's £30,000+ just to open the door and they take a cut. It's a quick way to start though as agencies and authorisation is in place.
Is anyone in the same position or can offer some guidence and advice it would be much appreicated.
Thanks
If I join a network it's £30,000+ just to open the door and they take a cut. It's a quick way to start though as agencies and authorisation is in place.
Is anyone in the same position or can offer some guidence and advice it would be much appreicated.
Thanks
Sorry to tell you this, but to set up a new independent broker, there is no way of escaping a reasonable investment just to open your front door. Consider:
1) Before you do anything you have to get FCA authorisation. Takes time, commitment and cost.
2) Which system are you going to transact on? You're going to need one of the specific broker systems OpenGI, CDL etc. A PC and internet connection isn't going to cut it.
3) Joining a network is only going to short cut so much. It may help you get access to some agencies, but if you are targeting niche motor you probably won't get access to the deals you need to make yourself competitive. Most networks cater for commercial brokers. However, I don't believe it will necessarily cost £30K as the one network I know offers different levels of membership, plus if they are taking a cut (which they do as you rightly say) is it an issue if you are already selling? Most niche insurance schemes are negotiated outside of a network, this comes down to reputation. Bit of a catch 22/chicken egg problem for you here - unless you already have contacts and a reputation?
4) How are you going to target your niche customers and develop leads? There is significant marketing spend by brokers in these areas. Research your competition and lead delivery very carefully. There is not much margin in buying leads in and it takes time to develop relationships to get into the aggregators, plus you need insurance schemes and again there is not much margin here.
Happy to discuss more if you want to go off line. I have some ideas regarding less risky routes you may want to pursue.
1) Before you do anything you have to get FCA authorisation. Takes time, commitment and cost.
2) Which system are you going to transact on? You're going to need one of the specific broker systems OpenGI, CDL etc. A PC and internet connection isn't going to cut it.
3) Joining a network is only going to short cut so much. It may help you get access to some agencies, but if you are targeting niche motor you probably won't get access to the deals you need to make yourself competitive. Most networks cater for commercial brokers. However, I don't believe it will necessarily cost £30K as the one network I know offers different levels of membership, plus if they are taking a cut (which they do as you rightly say) is it an issue if you are already selling? Most niche insurance schemes are negotiated outside of a network, this comes down to reputation. Bit of a catch 22/chicken egg problem for you here - unless you already have contacts and a reputation?
4) How are you going to target your niche customers and develop leads? There is significant marketing spend by brokers in these areas. Research your competition and lead delivery very carefully. There is not much margin in buying leads in and it takes time to develop relationships to get into the aggregators, plus you need insurance schemes and again there is not much margin here.
Happy to discuss more if you want to go off line. I have some ideas regarding less risky routes you may want to pursue.
Another broker here, if I was starting small/niche I'd definitely start off with a network and grow from there. The time/cost/complexity of setting up from scratch and keeping on top of compliance etc would detract from building the business in the early days in my opinion.
For a motor network take a look at one answer, good guys and they've got some niche motor stuff already.
Don't underestimate how much you'll spend on marketing, anything vaguely competitive will be expensive.
That said a niche motor broker with access to good schemes and a very targeted online marketing strategy I think has potential.
Depending on the niches you go for I may be able to supply some leads, would be worth dropping me a PM when you're further down the line.
For a motor network take a look at one answer, good guys and they've got some niche motor stuff already.
Don't underestimate how much you'll spend on marketing, anything vaguely competitive will be expensive.
That said a niche motor broker with access to good schemes and a very targeted online marketing strategy I think has potential.
Depending on the niches you go for I may be able to supply some leads, would be worth dropping me a PM when you're further down the line.
You've had plenty of offers of help offline so no doubt you will take one of them up, I'd be happy to chat things through with you if none of the other guys can help. I started my own intermediary two years ago and the start up costs were very low, in fact in hindsight I spent more than I needed to.
Regarding authorisation, becoming an Appointed Representative is the way to go, as opposed to becoming directly authorised by the FCA yourself from day one.
From what you say you have a good idea rather than an established book of business with an existing income stream. Chat the idea through with a few people to see whether they agree that it's a good idea. Then find a way to make it happen. I have several contacts in niche motor so I may be able to help.
Regarding authorisation, becoming an Appointed Representative is the way to go, as opposed to becoming directly authorised by the FCA yourself from day one.
From what you say you have a good idea rather than an established book of business with an existing income stream. Chat the idea through with a few people to see whether they agree that it's a good idea. Then find a way to make it happen. I have several contacts in niche motor so I may be able to help.
AR definitely the easiest wy to get in. I'm currently going down the Direct Auth route as my business now justifies and warrants it. My start up costs were zero, I lost about 25-30% of my income in overhead. The network route is a great place to learn and have someone pick up any midtakes before they get made.
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