4 things new insurance brokers NEED to know

An insurance broker calculating rates

The health insurance field is a lucrative, rewarding career path that many people, myself included, are happy to be a part of. If you’re thinking of breaking into the industry, then let me be the first to say: welcome! There are a lot of resources out there to help you build your business, but you have to know what you’re looking for. Here are 4 things that every new insurance broker needs to know.

1. The difference between an insurance agent and a broker

Insurance agents and brokers have very similar jobs. However, there is one key difference: an insurance agent is captive to one carrier, while a broker is contracted with multiple carriers of their choosing. A broker can sell any of the carriers that they’re contracted with.

For the professional, there are positives and negatives to both. A broker has way more carriers/options that they can sell; that also means there are more fees/expenses that they will have to pay. They will typically have to cover their own licensing and contracting fees. An insurance agent, meanwhile, can only sell options from the carrier that they work for. That carrier, then, will almost always cover any associated fees.

2. How to grow your client list

There are two things you need to focus on to grow your client list: diversification and Open Enrollment. Health insurance is a rapidly changing market. A lot of insurance carriers are coming into the market and, sadly, some carriers are going out of business. Luckily, as a broker, you have the choice to sell plans from multiple insurance carriers. You need to take advantage of this and diversify your offerings among all of your carriers. If you only sell a few carriers, then you’ll be in rough shape if they leave the market, change products, or cause issues for your clients. Diversity will alleviate all of those risks. The more carriers you sell, the more product knowledge you’ll have, the more clients you can help, and the less of a hit it will be to your income when a carrier leaves the market.

Second, Open Enrollment (or OE). OE is the most important time of the year for a health insurance broker. It runs from November 1st through January 15th, and it is the period set by the federal government that all Marketplace plans can be rewritten. For most people on ACA insurance plans, Open Enrollment is the only time when they can change their insurance.

There are over 30 million Americans each year who need to get health insurance on their own or renew their plan. This is a huge opportunity to grow as a broker. On average, brokers book over 60% of their income for the following year during Open Enrollment. My best advice during this time would be to tighten up, find a good mental space, and notify your loved ones that you are in the most important time of the year to grow your book of business. OE is the time to earn your money, so be prepared to work for it.

3. How to retain your clients

Client retention is all about relationship establishment. If you don’t have a good relationship with your clients and don’t make efforts to foster relationships, then the chances you keep them aren’t good. Everyone has to renew their marketplace plan every year. If your relationship isn’t strong, then it is easy for your clients to either find another broker or renew directly through their carrier.

How do you build a relationship? First, make sure you are genuine with your clients and check on them periodically throughout the year. Touch base with them on birthdays or holidays. You can call them or compose mass emails, but this may lose its personal touch – it will depend on how many clients you have. Personally, I love to send cards. There is something about receiving a handwritten note in the mail that shows how much you care. It shows that you took time out of your day to reach out to them in a different way than normal in the current day and age.

4. Options outside of the marketplace

Marketplace options, or ACA options, are plans backed by the federal government which offer subsidies, coverage for pre-existing conditions, and minimum essential coverage. Some people, though, are better off with options that are outside of the Marketplace.

Other options include short-term medical plans and Private Market health shares. Short-term plans are just what they sound like – they cover your client for a shorter term, typically 3 or 6 months. Some carriers have both short-term plans and marketplace plans. Private Market health shares are companies that offer medical coverage through a sharing ministry. They work the same way as any other insurance plan, but they are faith based and have to operate under a faith to be in the private market.

Both short-term plans and health share plans offer larger networks, lower deductibles, and have visits/extra support to make them a better fit for some clients. The best thing about being a broker is being able to offer ALL of these types of plans to clients, so you can always find the best option for them!

Take the next step

Life as an insurance broker is challenging at times, but always rewarding. You’re in control of your career – the only limit is how hard you want to work. All the while, you get to help people navigate a scary, confusing aspect of their life. There’s nothing else quite like it. If that sounds like something that interests you, then you can apply to be a broker with Apollo Insurance Group by sending us your resumé through our Careers page. Find your new career today.

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