The Psychology of Agency Ownership: Shifting from ‘Agent’ to ‘Business Owner’

Making the transition from a captive insurance agent to an independent agent can be like entering a whole new world. True, you’ll still be selling insurance, but everything about how you do it and what you’re responsible for will be different. 

As an independent agent, you are essentially a small business owner. The onus of building your business from the ground up will be on you, as there is no giant carrier backing you in case you have a down week or need support. 

In addition to major logistical differences, there are mindset differences that need to occur to make a successful transition to an independent agent. 

Below, we’ll discuss some of the psychology that goes into shifting from an “agent” to a “business owner.” 

Ownership 

Captive insurance agents are often thought of as producers. Their job is to sell and renew a lot of insurance policies.  

They are judged based on how many touchpoints they make with clients and compensated by how many deals they are able to close. It’s a traditional sales environment in which they work. 

While sales is certainly a part of life for an independent agent, you must shift your mindset from that of sales producer to business owner and leader. You need to think like an owner at all times and make decisions about what’s best for the business overall, not just your bottom-line sales numbers. 

Business owners in all industries need to find ways to create long-term value for what they offer. They need to create distinguishing factors that set them apart from their competition. 

To do so, they must truly understand what their target customers are thinking and what they need, so that they’re able to serve them well. 

Risk-Reward 

Captive agents don’t take much risk on a day-to-day basis. They show up to an office as employees, receiving a base salary that they can fall back on if they don’t have a great sales week. 

This is not the case with independent agents at all. There is no base salary, and only the profits the business generates are available for the business owner to take home. 

There’s a lot of risk that goes into starting and running an insurance agency, and that takes a completely different mindset than that of a captive agent. 

Business owners need to be able to take risks but balance those with the potential rewards that they can generate. In the beginning stages of a new agency, the risks are often much higher, and the finances may not be steady. 

Independent agents must have the wherewithal to ride out the storms and not get discouraged, coming up with new ways to build the business. 

Leadership 

Business owners are seen as leaders. They are responsible for making critical decisions on a daily basis that can affect the short- and long-term future of the business and those people the business employs. 

Becoming an independent insurance agent requires a mindset shift to that of a leader. If you have employees on your payroll, you must be able to educate, inform and motivate them to do their best and to buy-in to your agency’s mission and vision. 

You also must be able to trust others enough that you can delegate certain tasks to them. You no longer will have the time to handle every task, and must be able to delegate to create an efficient organization. 

In addition to generating sales, you must be able to manage uncertainty and different personalities, build people up and help them grow in their careers, and overcome the image that you’re just a salesperson. 

Growth 

The growth mindset is perhaps the biggest shift in psychology from captive agent to independent agent. As a business owner, you must always have an eye on the long-term future, figuring out ways that you can grow the business to create something that’s sustainable. 

To do so, you have to establish relationships with members of the local business community and the community at large. This requires hours spent networking, volunteering and establishing partnerships that are mutually beneficial. 

By doing this, you’ll be creating new referral sources, building your personal and brand reputation, and ensuring that you can continue to serve your community in the best way possible. 

Look to GLIA for Support in Growing Your Business 

Independent agents don’t have to go it completely alone. While you won’t have the backing of insurance carriers you work for, you can partner with organizations that can help you succeed. 

Good Life Insurance Associates (GLIA) is the leading Insurance Marketing Organization (IMO), helping independent agents grow their business and thrive. 

We provide agents with access to premium carriers throughout the country, as well as expert support services and tools. 

For more information, please contact us today.