This is a great question that I am often asked by entrepreneurs who are interested in getting involved with a stable industry such as insurance. Unfortunately, owning your own insurance brokerage is not as easy as it may at first seem. When looking to open your own insurance brokerage, a few basic considerations you need to make are:
- Do you have a Level 3 General Insurance License? This can take a minimum of 2 years to achieve and is required by the Insurance Council of Manitoba (ICM) before they will grant you the proper licenses to get your brokerage off the ground. Without the proper licenses, it is illegal to be transacting insurance.
- Did you want to sell Autopac to the General Public? For many years, Manitoba Public Insurance (MPI) has not issued any new brokerage appointments (permissions to sell their Autopac product) to anyone who wishes to open up an insurance brokerage. Instead, a person would have to buy out an existing insurance brokerage in order to have the use of their Autopac Appointment. And this is not as simple as it seems – with many rules regarding how MPI manages Autopac Appointments, all business changes will require their blessing before it can be confirmed.
- Can you get an Insurance Company to sponsor you? Every insurance broker needs to have at least one insurance company on board before they can open their doors. This means that, no matter what, this insurance company will agree to issue insurance based on policies that you submit to it.
In all of these cases, the big item needed to start-up your own brokerage is experience. Owning an insurance brokerage is a great dream for anyone to have but I personally would recommend that you work hard at getting experience and learning from senior brokers around you before taking this big leap.
Do not be in a hurry to succeed. What would you have to live for afterwards? Better make the horizon your goal; it will always be ahead of you.
William Makepeace Thackeray
While I have only been working in the IBAM office for a few short months, I often hear people get confused with how the licensing system in Manitoba works. I just thought I would take a moment to explain the different levels to you.
In Manitoba, there are 4 different General Insurance Licenses that are issued by the Insurance Council of Manitoba (ICM). A potential insurance broker must fulfill the required educational steps in order to qualify for a license which means passing an accredited insurance exam.
*Note – CEC stands for Continuing Education Credits which are required by your license renewal date of May 31 each year in order to maintain your insurance license.
Many brokers may find that they have earned a new license level during the course of the licensing year. This concerns them as most people want their license to be upgraded as soon as they pass the qualifying exam. If you have passed an IBAM course, IBAM always submits the successful marks to ICM who will note the update their system. This will trigger a revised license to be sent to the insurance broker showing their new license level at no charge to the brokerage.
For more information on how licensing works in Manitoba, simply contact Katrina at the IBAM office or you can visit the ICM Website at www.icm.mb.ca.
Terminology can be a bit of a bugger in the insurance industry. Whenever I am teaching my students, I always give them the Sneeze Paradox to explain this problem. Think of what happens when someone sneezes. For many, their first reaction is to offer the person a Kleenex. But are they really offering the person a Kleenex or are they actually offering them a tissue? Yep – they are offering a Tissue. We have just become very programmed as a society to always call tissues “Kleenex” thanks to successful marketing and branding campaigns.
What does that mean for insurance?
Ultimately this means that some of the common every day terms that we tend to use are not always used 100% correctly – even in an insurance office. Along with that, it also means some of the terms we use in everyday business transactions are different from the terms that someone like an accountant may use.
Whenever studying for an insurance course, always be sure to keep the Sneeze Paradox in mind. Exams will always ask for the true insurance definition of what something means, not just how it is used every day whether on the street or even in an office.
Looking for all the major insurance definitions? Contact the IBAM office to purchase a Glossary of Insurance Terms book which has all major insurance terms with their definitions clearly laid out in it.
Back when I was working in a brokerage, I was constantly hearing people refer to us as Agents and / or Brokers. It occurred to me that many do not realize that there is actually a difference between the two. Do you know how to tell them apart?
Well the first thing to realize is that there are only minor differences between the two. Both sell various types of insurance to the public. The real difference is who they are selling for.
An Agent works on behalf of the insurance company by selling only one product. If you have seen insurance company advertising from other provinces, you may have heard of State Farm. In a State Farm office, they can only sell State Farm Products thus making them State Farm Agents. These are also referred to as Direct Writers in the insurance world.
A Broker works on behalf of the client to ensure that they are able to find the best product that fits the clients’ needs. In many insurance offices across Manitoba, you will find that the office represents many different types of companies. This is to ensure they can find a product that best meets their clients’ needs.
In these offices, they tend to be independently owned and operated by individuals – not insurance companies. It is important to know this so you understand why brokers are working for you. While they always keep the insurance companies needs in mind, at the end of the day it is their clients who they really work for.
By using an Independent Insurance Broker, you know that you are getting trusted advice and that your insurance policy is being priced with more than one company to ensure you are getting the best coverage available to you.
I will be brutally honest – most people involved in the insurance industry did not grow up thinking that, when they grew up, they wanted to be an insurance broker. Myself? I was going to be a race car driver, which definitely did not pan out. (Refer to the fact that I now drive a toaster looking car – definitely not built for speed) The only exception to this observation seems to be people who knew that when they were older, they wanted to take over the family business which happened to be an Insurance Office.
But why is this? Insurance is a fundamental need of EVERYTHING!! It makes me chuckle to think how something this crucial is never really talked about when kids are growing up. Now you might be thinking, “What do you mean be fundamental? Isn’t insurance just a bunch of boring people pushing paper in an office somewhere”?
Well I can’t argue that it is primarily an office job but aren’t most jobs based somewhat in an office? The big difference with insurance is that it is a job where we provide something that everyone needs. Think about it. Movies can’t be made without insurance on the actors and sets. Homes cannot be purchased and mortgaged without insurance to protect them in the event of a fire. Cars cannot be on the road without protection on them.
Insurance is an industry that is recession proof, depression proof, and mundane proof. The world is not able to operate without insurance. It is this simple fact that makes is not only a stable profession but also one that is constantly evolving to meet the needs of the public. No two individuals, claims or policies are ever the same.
Know I don’t know about you, but that sounds like a pretty interesting industry to me…
Starting on any new career can be intimidating. Where do I start? Is this for me? Can I even do it? The real question that you should be asking yourself is – Why Not. A career in the insurance industry can mean a great stable future with the possibility of true success.
In this blog, I want to be addressing some of the common questions and conflicts that I have heard over the last 14 years of being in this industry. Whether or not it is how to get started, the training a person is required to do and even where it can take you, I can help. While I will admit to not know all the answers, I am sure that I can at least help steer you in the right path.
Along with that, if you have any questions or comments about anything that you read on this site, please do no ever hesitate to reach out to me. Comment on a post, email (email@example.com) or even call me at the office (204-488-1857). Helping someone gain success in their life is a true passion of mine so let me help you be the best you can be.