How to Start an Insurance Business

How to Start an Insurance Business in the UK

Insurance might not sound sexy, but it’s one of the most stable, profitable, and essential industries out there. Everyone needs it — whether it’s for their home, car, pet, business, or nan’s engagement ring. And if you’re sharp, trustworthy, and a bit of a problem solver, starting an insurance business in the UK can be a very smart move.

But make no mistake: this is a highly regulated industry. You can’t just print some leaflets and start flogging policies. You’ll need licenses, systems, and a rock-solid understanding of how insurance works — and more importantly, how to sell trust in a business where most people are wary by default.

What Is an Insurance Business?

An insurance business provides financial protection in case something goes wrong. That could be offering your own insurance products (like a full insurance company), or acting as a broker, which is far more common for new businesses.

Most people starting out will be brokers — essentially middlemen who help clients find the best policies from established insurers. You earn commission or fees in return. You're not underwriting the risk yourself — you're matching people to policies, advising them, and sometimes managing claims.

You can go niche — like insurance for tradespeople, taxi drivers, musicians, tech businesses — or broad, like home and motor. The opportunities are there if you know your market.

How Does It Work?

At its core, you're either selling policies directly or helping clients choose the right ones. You’ll work with insurers, understand their products, and then offer these to customers. As a broker, you’ll usually have agreements in place with insurers, giving you access to sell their policies and earn commission.

Your job is part sales, part consultancy, part admin machine. You’ll be assessing risks, explaining cover options, making sure clients understand what they’re buying, and handling the paperwork behind it all. And when things go wrong — say, a burst pipe or a stolen car — you might also help them navigate the claims process.

It’s not just about products — it’s about trust. People need to believe you know your stuff and won’t disappear the minute they hand over their premium.

How Do You Start One?

First, decide what type of insurance business you want to run. If you’re not going full-on insurer (and let’s be honest, you’re probably not), then broker or independent adviser is your likely route. From there, things get real:

You’ll need to get FCA (Financial Conduct Authority) authorisation. This isn't optional — if you’re advising, arranging or selling insurance, you must be regulated. The application process is detailed and takes time, but it's essential for credibility and legality.

You’ll also need professional indemnity insurance (yes, even insurance people need insurance), a clear business plan, and solid client onboarding processes. Oh, and compliance. So much compliance. You’ll have to keep records, follow conduct rules, and report to the FCA regularly.

Technology is another big part — you'll need systems to manage clients, quote policies, store documents, and track commissions. Whether that’s off-the-shelf broker software or a custom CRM, don’t skimp on it.

What Are the Benefits?

First up, it’s a recession-resistant industry. Insurance doesn’t go out of fashion when the economy takes a dip. In fact, people tend to want cover more when things feel uncertain. That means long-term income potential, recurring commissions, and a strong chance of building a stable client base.

There’s also a lot of flexibility. You can run it solo, from home, completely online. Or you can grow a team, open an office, and become a local go-to. Once you've got a good client base, you’re not constantly chasing new sales — you’re managing renewals and referrals.

If you do it well, you become a trusted adviser, not just a seller — and that’s good business. People stay loyal to someone who helps them protect what matters.

What Are the Drawbacks?

Let’s not sugar-coat it: the red tape is real. The insurance industry is one of the most tightly regulated in the UK, and for good reason. But that means you’ll be filling in forms, submitting audits, and occasionally wondering if you’ve accidentally broken a rule by using the wrong font in a quote email.

Getting FCA authorised is a process. It can take months and will require a squeaky clean background, a solid plan, and attention to detail. And once you’re regulated, you stay that way — the oversight doesn’t end.

It’s also a trust-based business. One mistake — one client who feels misled — can damage your reputation fast. You have to be organised, ethical, and properly trained. And while it can be lucrative, you won’t get rich overnight. It takes time to build up a good list of clients and income you can count on.

Do You Need Qualifications?

Not legally, but yes — in reality. The minimum standard is usually the CII (Chartered Insurance Institute) Certificate in Insurance. It’s a respected qualification that covers the basics of insurance, regulation, and ethics. If you’re going to be taken seriously — especially by the FCA or insurers you want to work with — you’ll want this.

As you grow, you might also take the CII Diploma or Advanced Diploma, especially if you're aiming to become chartered or build a firm that others will join.

Beyond that, you need business sense, decent sales skills, and a forensic attention to detail. If you don’t love paperwork and process, this probably isn’t the gig for you.

Summary

Starting an insurance business in the UK is a serious but rewarding move. Whether you're helping protect homes, businesses or beloved family dogs, you're offering something people genuinely need — and that never goes out of style. But it’s not a casual side hustle. You’ll need FCA authorisation, proper training, sharp processes, and a genuine commitment to doing things right.