The insurance industry is a booming industry. France is the leading European market in this area. Do you want to become an insurance broker? In this article, we provide all the information you need to get started.
Definition: What is an Insurance Broker?
According to Article L511-1 of the Insurance Code, an insurance broker is defined as a person providing recommendations on insurance or reinsurance contracts. In addition, he assists in the process of concluding contracts, in the execution and management of his contracts in the event of a loss covered by insurance. This business is part of the Insurance Intermediaries (IAS) which includes general agents, insurance representatives and intermediary representatives.
Since the profession of an insurance broker is part of the IAS, your missions will be governed by the Insurance Distribution Directive (DDA), which came into effect in 2018. It gives you an obligation with your future, especially in terms of advice and information. Customer. Thus, as an insurance broker, you will have 3 main missions:
- customer advice : As per DDA, it is your obligation and duty to advise your client as far as possible and furnish him with all the options available to him as per his requirements. Be aware that you may be liable for non-compliance with this instruction.
- conclusion of contract : You help your customers subscribe to their contract.
- contract management : In the event of a loss covered by insurance, you will be responsible for guiding your customer through the claim declaration process.
You can choose to specialize in one area of ​​insurance such as home or auto insurance, or choose to offer all types of insurance. As a broker, for example, you will in no way be the exclusive representative of an insurance company as an agent. You will be joining the distribution network of major insurance companies such as AXA or APR. As a result, you will have extranet access to which you can manage the contracts for which you have subscribed.
What training to become an insurance broker?
Proving professional competence is essential to become an insurance broker. So you cannot become an insurance broker without a diploma. Depending on the position you choose as a broker, you will have one or more levels of training to complete.
If you want to become a broker, you need to complete Level III training. This training is relatively short and lasts only a few days. This training is enough if you only want to become an employee of a brokerage firm.
On the other hand, if you want to become an independent insurance broker and hence want to become a manager or manager of your own company, then it will be mandatory for you to pass Level I and II of training. Level II involves at least 150 hours of training in an approved establishment. Level I is an internship of at least 150 hours with a broker, insurance company or general agent.
Nevertheless, you may be exempted from these training courses for managers in 2 specific cases:
- The first is if you have at least 2 years experience as a manager or 4 years as an employee with a broker, general agent or insurance manager.
- Another possible case is if you have a Master’s or BAC +2 level Diploma with specialization in Insurance recognized by the Insurance Code.
nice to know
The good news, know that some training courses may be 100% covered by your Personal Training Account (CPF). A personal training account is a tool that allows you to finance professional training throughout your career.
In addition to the requirements in terms of information, be aware that being a broker will primarily require rigor, a sense of negotiating and relational skills.
What is the legal status to become an insurance broker?
The profession of an insurance broker can be exercised under a number of situations. Among the most common formations in the area, we saw:
- EIRL (individual company with limited liability);
- SARL (Limited Liability Company);
- Or SAS (Simplified Joint Stock Company).
Each position has its own advantages and disadvantages, which is why we invite you to consult our comparative table of legal frameworks or to contact a legal professional to choose the most appropriate option for your project. Huh.
What are the administrative procedures to become an insurance broker?
The formalities to become an insurance broker are well defined. Two main steps are expected.
First, you need to register with the Register of Commerce and Companies (RCS), whatever your legal form. Actually, as an insurance broker, you are considered a trader. As part of this registration, you will be asked to withdraw Kbis. This document mentions whether you do this activity as a main or secondary activity. Also, if you do this activity as your main activity, you will get your NAF code (French Activity Nomenclature) assigned to you by INSEE. This is 6622Z for the activities of insurance agents and brokers.
Secondly, you have to compulsorily register in the Single Register of Insurance Intermediaries with ORIAS (Organism for Register of Insurance Intermediaries). Registration cost €25. As part of this, you will need:
- To take out professional liability insurance. In this you have to cover at least EUR 1.5 million per claim and EUR 2 million per year.
- To justify the professional competence of Insurance Intermediary (IAS) Level I if you are an employee and additional Level II and III if you are the manager of your brokerage company.
- A fraction of your Kbis.
- A copy of your criminal record. You have not been convicted during the past 10 years of offenses or misdemeanors defined in the Insurance Code (Article L.322-2) and the Monetary and Financial Code. These offenses include tax evasion, corruption or money laundering.
If you have to collect funds such as insurance premiums or compensation as part of your activity, it is imperative that you benefit from a financial guarantee on reimbursement of these funds. This must be for a minimum amount of €115,000. Note that if you have been mandated in writing by the insurance company to make contributions, claim settlement and collect premiums, you are exempted from the financial guarantee.
Once your complete file has been sent, ORIAS will respond to you within 2 months. Don’t hesitate to call in professionals in this field to make sure your file is complete. This will prevent you from slowing down the process in case the document is lost.
Warning
Please note that you will have to renew this registration each year or risk being taken out of register.
What are the Other Liabilities for an Insurance Broker?
open a professional account
To start your business, you need to open a business bank account. We recommend you inquire with traditional banks first to compare market prices, but also inquire with online banks and neo-banks that offer rates that are very attractive to professionals. Don’t hesitate to study this track as well.
choose the right insurance
To find insurance companies you will work with, you can purchase an existing client portfolio from another broker. However, for this you may have to pay commission twice a year. However, it will save you a lot of research time.
You should also note that if you want to become an online insurance broker, you will also need to create a website, which represents additional costs.
get the right software
To manage your business as efficiently as possible, you will need to equip yourself with contract management, accounting, invoicing and sales development software.
Do not hesitate to contact the professionals in this field to choose the suitable software.
questions to ask
What degree to become an insurance broker?
To become an insurance broker, you must have training as an insurance intermediary at Level I if you are an employee and in addition to Levels II and III if you are a manager of your own brokerage company.
What is the legal framework to become an insurance broker?
Structures such as EIRL, SAS or SARL generally meet the needs of starting an insurance broker activity.
What is the salary for an insurance broker?
On average, a starting independent insurance broker earns about $25,000 gross per year. After 10 years of seniority, this can go up to €90,000 gross per year with seniority. Be careful, as the pay varies according to the commissions.