Cover - My 7-Step Formula To Building A Successful Insurance Agency

My 7-Step Formula To Building A Successful Insurance Agency

By David Duford - January 03, 2023 - 5 Mins Read

Are you interested in learning how to build a successful insurance agency?

If your goal is to create a successful agency selling life insurance or any kind of insurance, then you’re at the right article!

As a successful insurance agency owner myself, I’ve discovered there is a specific 7-step formula all insurance should follow to build a successful insurance agency.

And NOT following even 1 of these steps may spell certain DOOM for not only your agency, but for your insurance career, too!

Let’s get started!


#1 Tip: Get Real Life Experience

This is actually a BIG problem many large insurance agencies propagate.

Nothing irks me more than these agencies pushing newly-licensed agents to recruit and build an agency.

Let’s get real…

What business do you have teaching anybody anything as a new agent?

You’ve never dealt with people telling you no, managing your frustration, dealing with the emotional turmoil every agent experiences.

Think about it…

Who in their right mind trusts an agent to train me who has zero street cred?

This is why it’s CRITICAL for your long-term success to pay your dues, developing your craft, taking your licks, and building a successful track record.

Simply focusing on selling first attracts the best insurance agent applicants to your agency.

Everyone wants to work with an experienced professional. And it’s no different in insurance sales.

#2 Tip: Don’t Quit Selling!

This is really important for those of you on the cusp of building your successful agency.

Some neophyte agents think agency building means “retiring” from personal sales efforts.


When I started my insurance agency in 2013. I was still selling final expense insurance full-time.

In fact, I continued selling full time for the next 4 years while simultaneously building my agency and recruiting agents.

Eventually, my overrides and renewals were sufficient enough to reduce my sales workload.

There’s important reasons to continue selling insurance while building your agency:

Takes Time To Replace Commission From Personal Sales

Rarely will agents replace their personal production income with override income right as they start their agency.

Truth be told, recruiting insurance agents is a numbers game.

You’re lucky if 1 out of 15 or 20 agents actually SELLS something.

Added, override income earned is a fraction of personal production commission. So expect more time to build your agency than you think.

Keep selling full time. Have your new agents do ride-alongs with you.

But do NOT give up on your sales efforts!

If anything, ramp UP your sales efforts.


Because building a successful insurance agency brings a host of risks, most notably chargeback risks.

How Chargebacks Work

A charge back is when an agent doesn’t pay back his advance commission back after a client lapses coverage.

And since you co-sign every single agent that joins your agency, you’re responsible for paying ANY debts your agents do not pay.

If you are not careful and financially stable, one bad agent could wipe you out.

I’ve had chargebacks on agents in the $10,000 to $15,000 range. It sucks!

And if you’re not financially prepared to swallow that, it may prevent you from building a successful insurance agency.

That’s why you continuing to sell insurance is so vital. You continue to make money while simultaneously training your agents.

Selling And Training Keeps You Sharp

Invariably, selling and training keeps you sharp. In fact, odds are high you’ll do BETTER.

How long should you expect to continue in personal production?

It took me 5 years after starting my agency. In year 4 I went part-time selling final expense, eventually fading out all regular personal production at the start of year 5.

Of course, your mileage may vary. You may do it faster or slower than me.

The important thing is to keep on selling while building your agency.

#3 Tip: Specialize In One Niche ONLY!

The following saying sums up my thoughts on successful agency building quite nicely:

“Anyone who’s everything to everybody is nothing to nobody.”

As an agent, it’s hard enough to learn 1 product. There’s underwriting for multiple products and the unique sales and marketing process to worry about.

Imagine shoving that PLUS 3 different niche markets down the throats of your newly licensed agents. Sounds problematic, eh?

I think that’s a recipe for failure, BOTH for the agent AND agency.

What’s the solution?

Pick your poison!

When I started my agency, I strictly sold final expense. And since this was my “bread and butter” product, I built my agency around that one product.

And it worked very well!

Specializing in one niche simplifies things tremendously. And SIMPLE is CRITICAL to building a successful agency.

#4 Tip: Your Unique Selling Proposition

Successful Agency Tip #4 is an extension of Tip #3.

Make an intentional effort to explain what makes your agency different from the competition.

You should be able to coherently answer the following questions:

    • Why would somebody want to do business with you?

    • How are you different from the name brand companies like State Farm or Farm Bureau?

    • What do you bring to the table that they don’t?

Effectively answering these questions requires thinking about what makes your agency special.

For example, points of differentiation include:

    • Sales training,

    • Lead programs,

    • Support, and,

    • Coaching

When starting my successful insurance agency as mentioned earlier, final expense was my core product line.

In fact, I did not add other insurance products like annuities, Medicare Advantage, and mortgage protection into my agency until my 5th year as an agency.

The reason I started with final expense sales is that I had a deep understanding of the product and could satisfy the points of differentiation above, well enough to stand a competitive chance recruiting quality insurance agents.

That’s why you need to get good at one thing. It’s how you effectively differentiate yourself and attract the best agents.

#5 Tip: Have A Strategy

Building a successful insurance agency takes a well thought-out strategy on how to attract the best insurance agents.

Luckily, there’s many ways to recruit. And most work to various degrees.

Recruiting Strategy Ideas

For example, you can place ads on job boards like Indeed and Craigslist.

Also, working your sphere of influence – people you know – is a great strategy for the right person.

Either way, you need an on-going agency building recruiting strategy.

And just like with selling insurance, recruiting requires you to “always be recruiting,” building your pipeline of agent prospects.

Otherwise, your potential for building a successful agency will dry up fast.

Develop your strategy. Feed the funnel. Keep talking to people.

Always be recruiting because as agents come and go.

#6 Tip: Have A Blueprint For Success

This is REALLY important to have if you want to build a successful insurance agency.

You MUST have a “blueprint for success,” a turn-key system to bring in hot prospects and a selling system to predictably close them.

Systems are everything in business.

And learning the craft of selling insurance is no different.

It’s vital to create a process that shows agents how to develop leads and close them.

And there’s no right or wrong method.

For example, your strategy can involve:

    • Face-to-face sales

    • Insurance telesales

    • Free leads, or

    • Working the agent’s warm market

I care less about WHAT strategy you use, and MORE about HAVING a well-defined strategy PROVEN to work.

Make Sure It’s Duplicatable

Further, multiple agents should be able to duplicate your blueprint of success.

Ideally, you want your process scalable and workable for multiple agents, as this is what maximizes your income.

If you are selling with a unique process that’s hard to duplicate, figure out another strategy that can be easily copied.

Even if it isn’t as good as your strategy, it’ll ultimately serve your goals of building a successful insurance agency MUCH better.

Without a blueprint in place, you really have no business recruiting agents.

Ask yourself, why would they want to work with you?

How will those agents experience success if they have no proven plan to implement?

#7 Tip: It’s All About Relationships

This last tip is probably the most important for long-term, lucrative success.

Building a successful agency requires building and cherishing long-term relationships with your agents.

What I’ve realized after being in the agency building business since 2013 is that this is a relationship business first and foremost.

Many agencies think too much on external efforts to build, such as mass recruiting with a “shotgun” method, versus internal efforts to build, such as building relationships with your agents and being of service to them.

This is a travesty!

Many fail out of this business that could have thrived, but because there is no effort to build relationships, they leave the business and never come back.

What do you do?

First, you have to craft your company culture. 

What are your values? What do you stand for?

You have to find agents that mesh well with you, sharing the same values, and can connect with your company’s culture.

Don’t think about agents as a number, squeezing the life out them before they bleed out and die.

Some agencies operate this way. I think it’s parasitic. It’s not fun. And it’s certainly not enjoyable.

Instead, I want strong relationships with my agent partners so they stick with me for their entire career.

Ultimately, this strategy is not only more profitable, but more meaningful, too.

Truly, there’s nothing more frustrating than losing an excellent agent to somebody else because you didn’t foster the relationship with them.

How To Build Meaningful Relationships?

It’s hard to teach this.

I suppose it’s sort of like building a successful marriage.

It takes time, effort, and honesty.

What I’ve discovered building my successful insurance agency focusing on relationships first, I’m working with better quality agents, and everything about what I do is more significant and profitable.

The good news? Very few agencies embody this belief. They look at agents like numbers. And this your opportunity.

While it may take you longer than your mass recruiting agencies to build your successful agency, odds are high you’ll recruit better quality people and build more meaningful relationships.

And in the long-run you’ll see substantial success!


Thanks for reading my 7 tips on how to build a successful insurance agency.

If you have questions about building your own agency, I’m happy to help! Send me a message here or leave a comment below.

Interested in building a successful insurance agency? 

I can help there, too =).

I have insurance IMO level commission contracts meaning I have the capacity to support large or small agencies with healthy commission contracts.

In addition, I have personal experience building a successful nationally-based insurance agency, recruiting more than 1,000 agents since 2013.

Reach out to me here if you’d like to learn more.

Thanks for reading!

30+ Hours Insurance Sales Training, Scripts, Books, And More... Yours FREE!
Claim nowimage
Our Picks
Join Us On Our Socials