Start a Captive Insurance Agency

1. 1

   Understand captive versus independent

   A captive agency sells one carrier's products under that carrier's brand, with the carrier's training, systems, and often leads. An independent agency (its own card here) represents many carriers and owns its book outright. Captive means lower entry and more support but less product choice and carrier-set rules. Choose the model deliberately; they are genuinely different businesses.

2. 2

   Get licensed for the lines you will sell

   You need a state insurance producer license for the relevant lines (property and casualty, life, health). This is mandatory and non-optional. Complete pre-licensing education, pass the state exam, and get appointed by the carrier, which does its own vetting.

3. 3

   Apply to a carrier's agency program

   Major carriers run structured agency-owner programs with financial and background requirements. Understand the capital they expect, the commission schedule they set, and the ownership terms of the book, which in captive models is often more constrained than in an independent agency. Read the agreement carefully before signing.

4. 4

   Use the brand and training, then localize

   The captive advantage is a known brand and a proven playbook. Lean on the carrier's training and marketing, then win locally through service and community presence. Your income is commission on new premium and renewals, so retention and referrals compound over time.

5. 5

   Build the renewal book that stabilizes income

   New-business commission is lumpy; renewal commission is the flywheel. Focus on retention, cross-selling additional policies to existing clients, and referrals, because a growing renewal book is what turns a volatile commission income into something steadier over years.

6. 6

   Plan staff and overhead against commission

   As the book grows you add service staff and office costs, all paid from commission income you do not fully control. Track your loss ratio, retention, and commission per policy so overhead never outruns the commissions the carrier pays you.

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