business plan for general insurance company

Insurance Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Insurance Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Insurance Agency Business Plan

You’ve come to the right place to create your own business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their insurance companies.

Essential Components of a Business Plan For an Insurance Agency

Below we describe what should be included in each section of a business plan for a successful insurance agency and links to a sample of each section:

• Executive Summary – In the Executive Summary, you will provide a high-level overview of your business plan. It should include your agency’s mission statement, as well as information on the products or services you offer, your target market, and your insurance agency’s goals and objectives.
• Company Overview – This section provides an in-depth company description, including information on your insurance agency’s history, ownership structure, and management team.
• Industry Analysis – Also called the Market Analysis, in this section, you will provide an overview of the industry in which your insurance agency will operate. You will discuss trends affecting the insurance industry, as well as your target market’s needs and buying habits.
• Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
• Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your insurance agency from the competition.
• Marketing Plan – In this section, you will detail your marketing strategy, including your advertising and promotion plans. You will also discuss your pricing strategy and how you intend to position your insurance agency in the market.
• Operations Plan – This section will provide an overview of your agency’s operations, including your office location, hours of operation, and staff. You will also discuss your business processes and procedures.
• Management Team – In this section, you will provide information on your insurance agency’s management team, including their experience and qualifications.
• Financial Plan – This section will detail your insurance agency’s financial statements, including your profit and loss statement, balance sheet, and cash flow statement. It will also include information on your funding requirements and how you intend to use the funds.

Next Section: Executive Summary >

Insurance Agency Business Plan FAQs

What is an insurance agency business plan.

An insurance agency business plan is a plan to start and/or grow your insurance business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your insurance agency business plan using our Insurance Agency Business Plan Template here .

What Are the Main Types of Insurance Companies?

There are a few types of insurance agencies. Most companies provide life and health insurance for individuals and/or households. There are also agencies that specialize strictly in auto and home insurance. Other agencies focus strictly on businesses and provide a variety of liability insurance products to protect their operations. 

What Are the Main Sources of Revenue and Expenses for an Insurance Agency Business?

The primary source of revenue for insurance agencies are the fees and commissions paid by the client for the insurance products they choose.

The key expenses for an insurance agency business are the cost of purchasing the insurance, licensing, permitting, and payroll for the office staff. Other expenses are the overhead expenses for the business office, utilities, website maintenance, and any marketing or advertising fees. 

How Do You Get Funding for Your Insurance Agency Business Plan?

Insurance agency businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Other options for funding are outside investors, angel investors, and crowdfunding sources. This is true for a business plan for insurance agent or an insurance company business plan.

What are the Steps To Start an Insurance Business?

Starting an insurance business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Insurance Business Plan - The first step in starting a business is to create a detailed insurance business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your insurance business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your insurance business is in compliance with local laws.

3. Register Your Insurance Business - Once you have chosen a legal structure, the next step is to register your insurance business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your insurance business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Insurance Equipment & Supplies - In order to start your insurance business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your insurance business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful insurance business:

• How to Start an Insurance Business

Where Can I Get an Insurance Business Plan PDF?

You can download our free insurance business plan template PDF here . This is a sample insurance business plan template you can use in PDF format.

How To Write an Insurance Company Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for insurance companies that want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every insurance company owner should include in their business plan.

Download the Ultimate Insurance Business Plan Template

What is an Insurance Company Business Plan?

An insurance company business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write an Insurance Company Business Plan?

An insurance company business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Insurance Company Business Plan

The following are the key components of a successful insurance company business plan:

Executive Summary

The executive summary of an insurance company business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your insurance company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your insurance company , you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your insurance company firm, mention this.

You will also include information about your chosen insurance company business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of an insurance company business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the insurance industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, the customers of an insurance company may include individuals, families, small businesses, and large corporations.

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or insurance company services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your insurance company may have:

• Specialized industry knowledge
• Proven track record
• Strong customer relationships
• Robust product offerings
• Innovative solutions

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. 
• Or, you may promote your insurance company business via word of mouth.

Operations Plan

This part of your insurance company business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for an insurance company include reaching $X in sales. Other examples include expanding to a new geographic market, launching a new product or service line, or signing on new major customers.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific insurance industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Insurance Company

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Insurance Company

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup insurance company business.

Sample Cash Flow Statement for a Startup Insurance Company

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your insurance company . It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it. All in all, a business plan is a key to the success of any business.  

Finish Your Insurance Business Plan in 1 Day!

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How To Write an Insurance Agency Business Plan + Template

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Launch Your New Insurance Agency With This Business Plan Template

Whether you're a brand new agent or one with several decades of experience, the idea of opening a new insurance agency probably seems daunting—where do you start?

One of the first things you’ll need to do is come up with a business plan for your insurance agency. After all, you can walk into a bank or a potential investor’s office looking for funding, but you won’t get very far unless you have a robust insurance agency business plan that proves you’re on the right track toward turning a profit in the near future.

Follow the steps below when building out your insurance business plan to maximize your chances of securing funding and getting your new agency off to a strong start.

7 Steps To Build Your Insurance Agency Business Plan

1. develop your executive and business summaries..

In business plan terms, the executive summary is the driving force behind your other decisions. It should explain why you’re starting your agency. The business summary is similar, but it should narrow down your “why” into a list of “hows.”

Ask yourself:

• Why do you want to open an agency?
• What types of insurance do you wish to sell?
• What do you hope to accomplish?
• What return on investment do you expect to receive?
• How are you going to generate demand and ensure supply for your service?

Jot your answers down so you can refer back to them as you move forward.

2. Decide whether you want to be a captive agent or an independent agent.

Many large agencies, such as Allstate and Farmers, work with captive agents who can only sell insurance for that specific provider. Independent agents, on the other hand, can sell insurance for multiple providers, but they get locked out of working with the big-name captive carriers who only work with captive agents. (Read more about captive agents here and get a seasoned agent’s POV on both types of agents here. )

Before you can nail down the details of the rest of your business plan, you’ll have to make a choice between these two options.

3. Do a market analysis.

Though it might seem like a tedious process, conducting a thorough market analysis is crucial to your success. Analyzing your local market—including the backgrounds, shopping behaviors, and preferences of your target customers—gives you the insights you’ll need to attract these folks to your business.

Your market analysis will look a little different depending on whether you prefer to be a captive or an independent agent. The state you live in is another factor that will affect your analysis—in fact, it may even influence your decision to be captive or independent.

Take a close look at the demographics of your region.

• How many homeowners live in your state?
• What’s the average insurance premium per home?
• How many people live in each home, on average?
• How many drivers live in your state?
• How many vehicles does the average household own?
• Do you live in an area with an aging population ?
• How many families live in your region?
• What insurance carriers do locals in your state gravitate toward?
• In your area, what might be some successful strategies for retaining clients (rather than just acquiring them)?

These questions are all important, but pay particular attention to the last one. If you open an agency without a plan for client retention, you’re going to struggle. And, unfortunately, this is one of the most overlooked aspects of an insurance agency business plan.

4. Identify where you’ll find your first clients.

It’s one thing to know there are X number of potential clients living in your state, but it’s quite another to have a plan that will help you reach out to those folks and land your first policy sales.

Some investors will require a list of leads before they’ll even consider funding your agency. Even if it’s not a requirement, it’s always a good idea to have a pipeline ready to go. This is where getting set-up for purchasing warm leads from EverQuote can put you in a great position for success.

Plus, tackling this step before you even open your doors will help you better understand the costs you’ll incur—and therefore how much startup funding you will need.

You might also consider other options, such as placing ads in local newspapers, going to networking events, investing in digital marketing, sponsoring local Little League teams, or asking for referrals.

5. Create a financial plan.

Many new agencies fail because their owners overlooked something critical during startup. Do your best to look at your financial plans from every angle:

• Where will you find leads, and how much will they cost?
• What is your advertising budget?
• Does this budget line up with the going rates of local newspapers, billboards, or online ads?
• Do you plan to have 1099 employees or W2 employees selling insurance for your agency?
• How will you decide on a commission and benefits structure for these employees?
• What retention and loss ratios (for clients and employees) do you expect based on the numbers of other agencies in your area?
• How will you handle the delay between policy renewals and income hitting your bank account?
• If there are X amount of people shopping for insurance in your area, what percentage of those people are in a niche you can serve?
• From that percentage of potential clients, how many do you think you can successfully land?
• If you sell policies to these customers, how much will you earn from their premiums?
• How do your projected profits compare to your expected advertising costs, the cost to buy leads, office rent, and other expenses?

Take detailed notes of your calculations, and try to run the numbers a few different ways to obtain a conservative outcome, a likely outcome, and a “best case scenario.”

6. Draw up a formal business plan using a proven format.

Your notes will be incredibly valuable as you move forward, but you’ll need a way to present them clearly and concisely in a way that looks attractive to investors.

Loan officers and investors don’t want to read long-form essays detailing your business background and your ideas for the future. Keep your format simple and straightforward, with clear sections that answer the questions investors will want to know.

We recommend a format similar to the following:

Executive Summary Overall mission Primary objectives Keys to success Financial plans Profit forecast for at least three years Business Summary Business overview Summary of startup costs Funding you’ll require Company executives/ownership Services Services you provide Market Analysis Overall business analysis Details of your competition Buying patterns of your competition Your planned buying patterns Market segmentation and analysis Target market strategies Include details for each market segment Strategy Your competitive edge Marketing strategy Sales strategy Yearly sales projections Key milestones Management Your plan for finding staff Financial Plan Funding you have accepted Funding you will need Detailed startup costs Calculations for your break-even point Projected profit Yearly profit Gross and net yearly profit Anticipated losses, if any Cash flow patterns Plans for balance sheet Calculations of important business ratios

7. Revise and adjust your plan over time.

You may not secure funding for your agency immediately. Even if you do, you’ll likely find that your real world numbers don’t match up exactly with your calculated projections. Plus, carriers frequently change their underwriting policies, and the economy itself is always in a state of flux.

Keep your business plan current by updating the information anytime circumstances change.

Start your journey with a full lead pipeline from EverQuote.

One of the scariest parts about starting a new agency is not being certain where and when you’ll be able to start making sales.

Skip the fear and the unknown and go right to making sales with warm real-time leads from EverQuote. Whether you’re still trying to find startup funding or your doors are already open, you can always boost your business and maximize your chances of a steady income by working with EverQuote.

Connect with us today.

Topics: Featured , Insurance Agency Growth

About the Author Chris Durling, VP of P&C Sales

Chris Durling is a visionary leader in P&C insurance sales and distribution, with over 10 years of experience in the industry.

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Insurance Company Business Plan Template

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1. Don't worry about finding an exact match

We have over 550 sample business plan templates . So, make sure the plan is a close match, but don't get hung up on the details.

Your business is unique and will differ from any example or template you come across. So, use this example as a starting point and customize it to your needs.

2. Remember it's just an example

Our sample business plans are examples of what one business owner did. That doesn't make them perfect or require you to cram your business idea to fit the plan structure.

Use the information, financials, and formatting for inspiration. It will speed up and guide the plan writing process.

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But, if you don't plan to share your plan with anyone outside of your business—you likely don't need everything.

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• Planning for Growth

How to Create an Insurance Company Business Plan

• by James Woodruff James Woodruff has been a ... more
• December 23, 2019
• 4  Minute Read
• Home > Blog > Planning for Growth > How to Create an Insurance Company Business Plan

Independent insurance agents need a strong business plan when they intend to start and grow their own company. The plan contains the initial ideas for the company’s products, target customers, competition and funding.

But, just because an owner took the time and effort to prepare an insurance company business plan doesn’t mean it shouldn’t be revised as the company grows. Things will change, and revenues and expenses won’t always match up with expectations.

If you’re curious about how to make your insurance business grow and become profitable, it’s time to revisit your original business plan. Let’s consider the plight of John, an independent insurance agent in Smalltown, USA.

John has been in business for a year working out of his house. He’s gotten a few new clients, but business hasn’t come in as quickly as he had hoped. John decides to review his original business plan and make updates based on where the business is now and where he wants it to go.

We’re going to move through all the must-haves of an insurance company business plan through the lens of John’s updates:

Legal Structure

Since the beginning, John has been operating as a sole proprietor. Now, he feels it’s time to hire his first employee and lease an office to gain credibility. He will need to register the business name with the state, incorporate the business and obtain federal and state tax ID numbers.

Licenses and Insurance

In addition to getting a business owner’s policy and obtaining local business licenses and permits, insurance agents need specific insurance policies to sell their products. Accordingly, John has taken out an errors and omissions policy and a surety bond to cover any professional mistakes, such as overlooking the renewal date for a client’s policy.

Insurance Products

John’s initial idea was to keep the business simple and sell personal auto and homeowners insurance to individuals. However, he learns that he must widen his product offerings to reach a broader number of potential customers and expand his income.

John decides to add life insurance and commercial insurance products to his offerings. Commercial insurance will include insurance for general business liability, property damage and bodily injuries. He knows that he may need to take additional courses and apply for other state licenses to sell these products, so he includes that in this section of the business plan as well.

The best way for a new insurance agent to offer more insurance products is to join a cluster group. These are groups of insurance agents who join together to sell products of major insurance carriers. Because of their higher number of members, a cluster group can qualify to sell more products and negotiate better rates with large insurance companies than a single agent can by themselves.

Competition

John has several competitors in Smalltown who are also independent agents, but they have been in business for several years and have dedicated clientele. They also offer a wider range of insurance products, so poaching their customers would be difficult and expensive.

Smalltown has several captive agents who only represent specific major insurance carriers, such as Allstate, State Farm and Nationwide. These agents are backed with strong corporate advertising campaigns and promotional material from their employers.

Competitive Advantages

Since all of the independent agents offer basically the same products, John has to provide a broad range of products with better service. He needs to position himself as a client’s go-to agent for advice and one-stop shopping for all of their insurance needs.

Competing by offering better service means spending time — whatever it takes — with a customer to accurately determine their needs, provide advice and make practical, affordable recommendations. This will establish John as a trusted adviser and, hopefully, lead to referrals.

Online Presence

John set up a website on his own when he started. However, the website has been ineffective at generating leads for new customers. John needs to hire a website designer to build an attractive and competitive website that will bring in traffic and new leads. It also needs to be mobile-friendly.

As the business grows, John can ask for reviews from satisfied customers to post on his website. He can also collect emails from prospects and build an email marketing program that suggests contacting the agency for free quotes.

Social marketing is a fact of life in today’s markets, so John should increase his online presence with LinkedIn, Twitter, Facebook and Instagram.

John has not been active enough in the community. He needs to join community organizations, like the local Chamber of Commerce, and start networking more. The Agent Support Network of America lists some marketing tips catered to independent insurance agents, including:

• Contacting real estate agents and setting up partnerships with them
• Sponsoring a table at community and charity events
• Creating a referral program with rewards such as movie tickets, gift cards to local restaurants, or discounts on the referrer’s premiums

Advertising

Create brochures and fliers, and place ads in local newspapers. While consumers head mostly to the internet to search for agents, people still read newspapers and they represent a source for business.

Setting Objectives

The revised insurance company business plan should have quantifiable objectives with measurable performance metrics. As examples, these would include measurement of:

• New customer leads per month
• Number of new policies sold
• Website traffic
• Leads from website
• Marketing and advertising budget and expenses

Paying business expenses and funding growth takes money. Although John started his business with savings, income in the first year did not meet the original projections. John will need to prepare a new budget that includes additional costs for advertising, marketing, administrative wages, new licenses, utilities and office rent.

The revised budget will have to specify where the additional funds will come from. He may have to tap into his working capital or consider a small business loan to carry out some of these investments.

An insurance company business plan is the foundation for the growth and development of the company. It is not a stagnant document that gets reviewed once a year and placed on the shelf. It is a road map with guideposts and goals that will enable an owner to reach their objectives. If you’ve been wondering how to make your insurance business grow, revisiting your business plan should be your first step.

Tags: Agriculture , Budgeting for Small Business , Business Services , Marketing for Small Business , Restaurants & Hospitality

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Crafting an Effective Insurance Agency Business Plan

If you're an independent insurance agent, you know that success doesn't happen by chance. It requires strategic planning and a clear roadmap for the future. That's where an insurance agency business plan comes into play. 

In this guide, we'll explore what a business plan is, why it's essential, and how to create one tailored to your home insurance agency.

At a glance:

• Crafting a well-defined insurance agency business plan provides strategic direction and goal-setting for success.
• A comprehensive business plan allows for adaptability in an ever-evolving industry.
• Defining your brand, researching funding options, and staying compliant with regulations, are the ingredients that can transform your business plan into an effective tool for growth.

Benefits of having a business plan

Having a solid roadmap is like holding a compass in a dense forest. It not only guides you on how to become a successful insurance agency, but also ensures you stay on course.

Strategic direction

So let’s continue that analogy: you’re on a road trip without a map, compass, or GPS. You might eventually reach your destination, but it would be a long and uncertain journey. Similarly, running an insurance agency without a business plan is like traveling without a guide. A well-crafted plan provides a clear path and helps you stay focused on your goals.

Goal setting

Setting realistic and achievable goals is vital for any business. Your insurance agency business plan acts as a compass, allowing you to establish clear objectives. Whether you want to increase your client base, revenue, or expand your services, a business plan helps you chart the course.

Investor confidence

If you find yourself in a place to seek external funding, whether from investors or lenders, a comprehensive business plan is a must. It demonstrates that you've thought through your business strategy, increasing your chances of securing financial support.

Adaptability

The insurance industry is never stagnant, and as such adaptability is key. A business plan isn't set in stone; it's a living document that can be adjusted as circumstances change. If done correctly, it allows you to stay flexible and make informed decisions as market trends shift.

Key components of an insurance agency business plan

Your business plan is the document that transforms your vision into a tangible reality, ensuring your journey as an independent insurance agent is not only successful but prosperous too. 

Let’s explore the key components of an effective business plan, including the executive summary, company overview and more. 

Executive summary

The executive summary serves as the elevator pitch for your entire business plan. It's designed to capture the reader's attention and give them a quick, compelling overview of your insurance agency. You'll want to concisely highlight your agency's mission, vision, and goals. Think of it as distilling your agency's essence into a few powerful sentences. It's an invitation for the reader to learn more about your agency's journey.

Company overview

The company overview is your opportunity to introduce your insurance agency in detail. It's where you set the stage for the rest of your business plan. In this section, you’ll want to dive into the history of your agency, including its founding story, location(s), and size. You should also describe every type of insurance product you offer and provide a snapshot of what makes your agency unique.

Industry analysis

The industry analysis puts your industry knowledge to good use. It's all about understanding the broader insurance market, including its trends, challenges, and opportunities. In this section, you'll research and present data and insights into the insurance industry. Discuss market trends, regulatory changes, and any challenges that could impact your independent agency. Identifying opportunities within the industry allows you to position your agency effectively to take advantage of them.

Customer analysis

Understanding your target market is essential for tailoring your services and marketing efforts effectively. Create detailed buyer personas that encompass their needs, preferences, and pain points. This information is the foundation for developing products and services that resonate with your audience.

Competitive analysis

Knowing your competition is about gaining insights into their strengths and weaknesses. When performing your market analysis, or market research, be sure to look at factors like their market share, marketing strategy, pricing models, and customer service practices. Understanding how you stack up against the competition will help you develop a winning strategy that sets your agency apart.

Marketing plan

Your marketing plan is the strategic playbook for how you'll attract and retain clients. Specify your marketing channels, both online and offline; outline your budget and set measurable goals. Whether it's through digital advertising, content marketing, or print advertising, your marketing plan should maximize your independent insurance agency's reach and impact.

Operations plan

The operations plan is the behind-the-scenes blueprint for how your independent agency runs day-to-day. Detail your team structure, office setup, and technology requirements. It's about ensuring smooth workflow and efficient service delivery. This section gives a clear picture of how your agency operates on a daily basis.

Management team

Your management team is the engine that drives your agency. Introduce the key members of your management team and highlight their expertise. Explain how their skills and experiences contribute to the agency's success. 

Financial plan

The financial plan is the heart of your business plan. It's where you demonstrate that your agency is not just a vision but a financially viable venture. For any enterprise, including insurance agencies, it’s important to provide detailed financial projections in your business plan, including income statements, balance sheets, and cash flow statements. Set clear financial goals and explain how you intend to achieve them.

Tips for creating an effective insurance agency business plan

Creating an insurance agency business plan is akin to crafting that roadmap we talked about earlier. But here's the twist—this isn't just any road; it's twisting and on an ever-changing landscape. To navigate it successfully, you need more than just directions; you need insider tips and tricks.

Define your brand

Your brand is more than just a logo; it's who you are. Define your brand identity, including your mission statement, core values, and unique selling proposition. A strong brand will set you apart in a crowded market.

Research funding options

If you need capital to start or expand your agency, explore different funding options, which could include personal savings, loans, or investors. Your business plan should outline your funding needs and how you intend to secure the necessary capital.

Apply for licenses

Ensure that you comply with all regulatory requirements in your area. This includes obtaining the necessary licenses and insurance policies to operate legally. Failing to do so could jeopardize your agency's success.

Set goals and establish metrics

Your business plan should include specific, measurable, and time-bound goals. Track key performance indicators to measure your progress and adjust your strategy accordingly. Regularly reviewing and updating your plan keeps you on the path to success.

A strategic roadmap for success

For an independent insurance agency, a well-crafted business plan is not simply a document; it's a dynamic tool that provides strategic direction, fosters adaptability, and instills investor confidence. By defining your brand, understanding your market, and detailing your operational and financial strategies, your insurance agency business plan becomes the compass guiding you through the complexities of the industry. 

With clear goals, a solid management team, and a proactive approach to change, your agency can navigate the insurance industry effectively, ensuring not only agency survival but also sustainable growth

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About the Author

Alyssa Little | Senior Content Strategist

Alyssa is the Senior Content Strategist at Openly, collaborating with industry thought leaders to provide insightful and informative content in the home insurance space. With over 15 years experience in content marketing strategy, copywriting, and editing, Alyssa has refined her expertise through her work at such companies as Gartner, Nike, and Trupanion. Alyssa holds a BA in History from the University of Puget Sound and an MA in Museum Studies from Newcastle University.

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Insurance Agency Business Plan Guide + Free Example

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The insurance agency industry offers substantial potential for growth and success. While some may perceive managing an insurance agency as a simple task, involving only policy sales and customer interactions, it actually requires careful planning and precise execution to thrive. Therefore, having a well-structured business plan is crucial for achieving success in this industry.

Our primary expertise lies in creating insurance agency financial projections . However, we understand that some of our clients seek comprehensive business plans. That's why we've taken the initiative to delve into this topic and cover the following aspects in our comprehensive insurance agency business plan guide and sample plan: 

Why write a business plan for an insurance agency?

What to include in an insurance agency business plan, insurance agency business plan outline, what type of insurance agency to start, how to analyze the competition for an insurance agency, how to create financial projections for an insurance agency, example insurance agency business plan, insurance agency business plan faqs.

Creating a well-structured business plan is crucial for insurance agency owners seeking financial support from investors, banks, or financial institutions. This plan should encompass a comprehensive evaluation of the insurance market, a clear and strategic approach, and a thoughtful assessment of potential risks and rewards. By showcasing your in-depth understanding of the insurance industry, your growth strategies, and your capability to navigate challenges, a robust business plan increases the likelihood of attracting the necessary funding for your insurance agency venture.

An insurance agency business plan should present persuasive reasons why clients will choose your agency's services, demonstrate why you or your team are the ideal operators for the insurance agency, and provide a robust financial projection to assure potential investors and lenders of the investment's viability. Below is a comprehensive outline of our complimentary insurance agency business plan template.

We suggest the following sections for your Insurance Agency business plan:

Executive Summary

Company Description

Market Analysis

Product and Service Offerings

Marketing Plan & Customer Acquisition

Operating Plan

Financial Plan

Choosing the right type of insurance agency will depend on your interests, expertise, and the market demand in your area. Here are some common types of insurance agencies you could consider starting:

General Insurance Agency:

A general insurance agency deals with a wide range of insurance products, including auto insurance, home insurance, business insurance, liability insurance, and more. This type of agency offers a diverse portfolio of insurance products to cater to a broad customer base.

Specialized Insurance Agency:

Instead of offering a wide range of insurance products, you can focus on a specific niche or industry. For example, you could start a health insurance agency, life insurance agency, or a commercial property insurance agency. Specializing can allow you to become an expert in a particular area and build strong relationships with clients in that niche.

Independent Insurance Agency:

Independent agencies work with multiple insurance carriers, giving them the flexibility to offer a variety of insurance products from different companies. This model allows you to compare coverage options and find the best policies for your clients' needs.

Captive Insurance Agency:

A captive agency represents a single insurance company and sells only that company's policies. While you have less flexibility in terms of product offerings, captive agencies often benefit from the support and training provided by the parent insurance company.

Online Insurance Agency:

With the rise of digital technology, you could consider starting an online insurance agency. This model allows you to reach a broader audience and provide insurance services through a website or app. It can be a cost-effective way to start and operate an agency.

Insurance Brokerage Firm:

Instead of focusing on selling insurance policies directly to clients, you could start an insurance brokerage firm. As a broker, you would act as an intermediary between clients and insurance companies, helping clients find the best coverage at competitive rates.

Before deciding on the type of insurance agency to start, conduct thorough market research to assess the demand for different types of insurance in your area. Also, consider your own skills, knowledge, and passion for specific insurance sectors. Having a clear understanding of your target market and your own expertise will guide you in making the right decision for your insurance agency. Additionally, make sure to comply with all legal and licensing requirements for insurance agencies in your region.

When it comes to analyzing the competition in the insurance agency industry, there are a few valuable tools you can use, with one of the most useful being Ahrefs.

Ahrefs is a powerful SEO tool that enables you to research and dissect your competitor insurance agencies' online presence. By inputting a competitor's website into Ahrefs, you can gain valuable insights into their organic traffic and the specific keywords responsible for driving that traffic.  For example, in Indianapolis we can see that Carson Insurance Agency is receiving roughly 100 monthly visitors from organic traffic.  

The tool provides valuable data on your competitor's organic traffic and highlights the keywords that are leading visitors to their website.

By understanding the keywords and SEO strategies employed by your insurance agency competitors, you can tailor your content and marketing strategies to effectively compete in the same areas or identify niche segments that may be underserved. This knowledge can help enhance your insurance agency's online visibility, attract more customers through search engines, and position your business for success in the competitive insurance industry.

SWOT Analysis: While not a digital tool SWOT analysis can be incredibly helpful in analyzing competition. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. By comparing these aspects between your agency and your competitors, you can identify areas where you might have a competitive edge or areas where you need to improve. Many business websites and educational institutions offer free SWOT analysis templates and guides that can be easily adapted for an insurance agency.

In the insurance agency industry, financial projections are influenced by distinct factors such as client acquisition rates, policy pricing, seasonal demand, and operational expenses. Using an insurance agency financial projection template can simplify the process and boost your confidence. However, accurate financial projections serve a greater purpose than just showcasing revenue potential; they paint a clear picture of the path to profitability and the achievement of your insurance business goals. By considering these crucial elements, you can create a solid financial plan that guides your agency towards success and ensures the realization of your objectives.

To create precise projections, follow these key steps:

Estimate startup costs for your insurance agency, including office space, technology infrastructure, licensing and certifications, marketing, and initial staff training.

Forecast revenue based on projected client acquisition rates, average policy premiums, and potential growth in your customer base.

Project ongoing operational costs , such as staff salaries, rent, technology maintenance, marketing expenses, and administrative overhead.

Estimate costs related to providing insurance policies and services, such as commission payouts to agents, underwriting expenses, and claims management.

Calculate the capital needed to launch and sustain your insurance agency, covering initial expenses and providing working capital for continued growth.

While financial projections are essential for your insurance agency's business plan, seek guidance from experienced professionals in the insurance industry. Adapt your projections based on real-world insights, leverage industry resources, and stay informed about insurance market trends and evolving customer preferences to ensure your financial plan aligns with your goals and positions your insurance agency for long-term success.

Explore our comprehensive Insurance Agency Business Plan below. For your convenience, a downloadable Google Doc version of this insurance agency business plan template is available, allowing you to personalize and tailor it to your specific needs. Additionally, a helpful video walkthrough is provided, guiding you through the process of customizing the business plan to perfectly align with your unique insurance agency concept.

Table of Contents

1. executive summary.

1.1 Organization Overview

1.2. Objectives

1.3. Mission Statement

2. Organization Description

2.1. Organization History

2.2. Legal Structure

2.3. Unique Value Proposition

2.4. Target Beneficiaries

3. Market Analysis

3.1. industry overview.

3.2. Collaborator and Competitor Identification

3.3. Target Beneficiaries

Key Point  1

4. Marketing and Fundraising

4.1. Strategic Plan

4.2. Program or Service Offerings:

4.4. Distribution Channels

4.5. Promotions and Fundraising

Key Point  2

5. Organizational Structure and Management

5.1. Organization’s Facility & Location

5.2. Staffing Plan and Volunteer Management

5.3. Governance, Financial Management, and Accountability

Key Point  3

6. financial plan.

6.1. Startup Costs

6.3. Expense Projections

6.4. profit and loss statement, 6.5. cash flow projections, 6.6. break-even analysis, 7. appendix.

7.1. Supporting Documents

7.2. Glossary of Term

7.3. References and Resources

Key Point  5

 1.1. company overview.

Briefly introduce the company's background, products or services, and target market.

      -  Example: SecureRide Auto Insurance Agency is a leading provider of auto insurance solutions in Atlanta, Georgia. We specialize in offering comprehensive coverage options tailored to meet the unique needs of drivers in the area.

   1.2. Objectives

Outlines the company's short-term and long-term goals.

        - Example: Establish SecureRide as the go-to auto insurance agency in Atlanta, capturing a significant market share and achieving a 40% increase in policyholders within the first year. 

        - Example: Long-term: Expand our presence in Georgia and neighboring states while maintaining a high level of customer satisfaction.

  1.3. Mission Statement

 Describes the company's purpose and core values.

        - Example: At SecureRide, our mission is to provide reliable and affordable auto insurance coverage to drivers in Atlanta. We are committed to ensuring our customers have the peace of mind they deserve on the road by delivering exceptional service and tailored insurance solutions.

  1.4. Keys to Success

Highlights the factors that will contribute to the company's growth and success.

        - Example: Delivering competitive pricing and flexible coverage options tailored to our customer's needs. We prioritize superior customer service, ensuring responsiveness, transparency, and personalized support

2. Company Description

   2.1. company history.

Provides context on the company's background and founding story.

        - Example: SecureRide Auto Insurance Agency was established by Mark and Emily Roberts, who have a combined experience of over 20 years in the insurance industry. Mark brings expertise in risk assessment and underwriting, while Emily has a strong background in sales and customer relations.

   2.2. Legal Structure

 Describes the company's legal structure (e.g., sole proprietorship, partnership, LLC, corporation).

        - Example: SecureRide Auto Insurance Agency operates as a limited liability corporation (LLC)

 2.3. Unique Selling Proposition

  Emphasizes the company's competitive advantage or unique offerings.

        - Example: SecureRide sets itself apart by offering customizable auto insurance coverage tailored to each client's specific needs. Our advanced technology allows for quick and accurate quotes, efficient claims processing, and a seamless customer experience.

  2.4. Target Market

Defines the company's ideal customer base.

        - Example: Focuses on serving the residents of Atlanta, Georgia, and its surrounding areas. Our primary target market includes drivers of all ages and backgrounds who seek reliable, affordable, and comprehensive auto insurance coverage.

  Presents a general overview of the industry, its trends, and growth potential.

        - Example: The auto insurance industry in Atlanta, Georgia, is a thriving and competitive market, driven by the high number of vehicles on the road and the state's insurance requirements. With a growing population and an increasing emphasis on vehicle safety, the demand for reliable auto insurance coverage is expected to continue rising.

3.2. Competitor Analysis

 Evaluates the company's direct and indirect competitors, as well as their strengths and weaknesses.

        - Example: Direct competitors: Atlanta Auto Insurance Company: A national insurance company with a branch in Atlanta, providing a wide range of auto insurance policies. 

        - Example: Indirect competitors:  EasyInsure Online: An online insurance platform that allows customers to compare and purchase auto insurance policies from various providers. 

3.3. Target Market Analysis

Explores the company's target customers, their demographics, preferences, and pain points.

        - Example: SecureRide’s target market in Atlanta, Georgia consists of young professionals, families and homeowners, commuters and business professionals, high-value vehicle owners, and retirees and seniors. 

3.4. Market Opportunities

Identifies potential opportunities for the company to grow within the market.

        - Example: SecureRide can seize market opportunities by leveraging digital marketing strategies to reach a broader audience, offering innovative coverage options such as usage-based insurance, and establishing partnerships with local car dealerships and auto repair shops. 

• Example 1: Conduct a survey among Atlanta residents to assess their knowledge of auto insurance providers and their satisfaction with existing options. This will help identify gaps in the market and potential opportunities for SecureRide. (e.g., 65% of surveyed residents are unaware of any specialized auto insurance agencies in Atlanta, indicating a potential market niche)
• Example 2: Analyze the market share and customer satisfaction ratings of established auto insurance companies in Atlanta to understand the competitive landscape and areas for differentiation. (e.g., Company X holds a 30% market share but receives consistently low customer ratings for claims handling, suggesting an opportunity for SecureRide to excel in customer service)
• Example 3: Keyword search volume to see growth in demand or specific types of boutique insurance needs

4. Marketing and Sales Strategy

4.1. product or service offerings: .

Describes the company's products or services in detail.

        - Example: SecureRide offers a comprehensive range of auto insurance coverage options, including liability insurance, collision coverage, comprehensive coverage, uninsured/underinsured motorist coverage, and additional specialized coverage for high-value vehicles or specific driver profiles.

4.2. Pricing Strategy

 Outlines the company's approach to pricing its products or services.

        - Example: SecureRide adopts a competitive pricing strategy based on market analysis, offering affordable premiums and flexible payment options to ensure accessibility and value for customers.

4.3. Sales Strategy

  Explains how the company plans to generate sales and build

customer relationships.

        - Example: SecureRide will leverage a multi-channel sales approach, utilizing a combination of online platforms, direct sales efforts, and strategic partnerships with car dealerships and automotive service providers.

 Describes the methods through which the company will deliver its products or services to customers.

        - Example: SecureRide primarily operates through its physical office location in Atlanta, Georgia. Additionally, the company will have an online presence through a user-friendly website and mobile app allowing customers to conveniently access information, request quotes, and manage their policies.

4.5. Promotions and Advertising

 Details the company's promotional efforts and advertising strategies.

        - Example: SecureRide will implement targeted digital advertising campaigns, including search engine marketing, social media advertising, and online display ads, to increase brand visibility and attract potential customers.

• Example 1: Develop partnerships with local car dealerships and auto repair shops to offer exclusive discounts on insurance policies to their customers. This can generate initial traction and referrals. (e.g., SecureRide establishes partnerships with three prominent car dealerships, resulting in 50 policy sales within the first month)
• Example 2: Launch a targeted digital marketing campaign that emphasizes SecureRide's competitive rates, personalized customer service, and quick claims processing. This can attract potential customers seeking a more customer-centric auto insurance experience. (e.g., The campaign generates 500 leads and converts 20% of them into policyholders within the first quarter)
• Example 3: Build a social following or Youtube channel that simplifies auto insurance for everyday people that can serve as a possible customer base when the business launches.

5. Operations and Management

5.1. facility location and layout.

 Specify the agency’s physical business location and refers to the internal arrangement and organization of the space.

        - Example: SecureRide is strategically located in a prime area of Atlanta, Georgia, ensuring easy accessibility for clients and proximity to major transportation routes. The facility is designed with a customer-centric approach, providing a welcoming reception area, private consultation rooms, and a well-organized layout that promotes efficient workflow and privacy for sensitive discussions

5.2. Staffing and Expertise: 

Ensures the agency can effectively serve its clients and provide comprehensive insurance solutions.

        - Example: SecureRide has a team of experienced insurance professionals who possess in-depth knowledge of the auto insurance industry, including underwriting, claims processing, risk assessment, and customer service. 

5.3. Customer Service:

 Involves the process of providing support to policyholders and potential customers throughout their insurance journey.

        - Example: Customer satisfaction and retention are key objectives for SecureRide. The agency strives to deliver personalized assistance to clients, addressing their insurance needs, offering guidance in policy selection, and providing prompt and efficient claims assistance. 

• Example: SecureRide's founding team brings a wealth of industry experience, ensuring a deep understanding of the auto insurance landscape and customer needs. For example, Mark Roberts, the CEO, has over 15 years of experience in the insurance industry, specializing in auto insurance. Sarah Roberts, the COO, has a background in risk management and claims handling, ensuring efficient operations and superior customer service.

5.4. Technology and Systems:

Refers to the utilization of advanced technological tools, software systems, and digital platforms .

        - Example: SecureRide leverages advanced insurance management systems and technology solutions to streamline operations, enhance efficiency, and improve customer experience. These systems enable seamless policy management, online quoting and applications, secure data storage, claims processing, and effective communication with clients. 

All of the unique Insurance Agency projections you see here were generated using ProjectionHub’s Insurance Agency Facility Financial Projection Template . Use PH20BP to enjoy a 20% discount on the template. 

   6.1. Startup Costs

  Provide a detailed breakdown of the total startup costs requirements, and where you plan for those funds to come from. You will also want to breakdown how the startup costs will be used including working capital to cover losses before the business breaks even.

        - Example: Creating a solid financial plan is crucial, and we are taking the necessary steps to ensure the success of SecureRide. We estimate needing around $190,000 to cover our startup costs as well as cover losses until we become cash flow positive. $90,000 will come from personal investment & a small equity investment from another partner, and then we are seeking a $100,000 business loan.

6.2. Revenue Projections

Provides an estimate of the company's future revenue based on market research and assumptions.

        - Example:  SecureRide projects $359,000 in revenue in the first year. The company anticipates steady growth in revenue over the initial five-year period.

 Estimates the company's future expenses, including fixed and variable costs.

        - Example: SecureRide's expenses include property lease, accounting, advertising, commissions, utilities, and software costs.

Summarizes the company's revenue, expenses, and net income over a specific period.

        - Example: SecureRide’s expects to achieve profitability within the first few years of operation.

 Outlines the company's projected cash inflows and outflows.

        - Example: SecureRide cash flow projections account for fluctuations & onboarding additional agents.

  Determines the point at which the company's revenue equals its expenses.

        - Example: SecureRide anticipates reaching its break-even point in year 3 but the industry is very low margin.

Watch how to create financial projections for your Insurance Agency

Key Point  4 

• Example 1: Benchmark SecureRide's projected premium rates against industry averages and adjust accordingly to remain competitive while ensuring profitability. (e.g., SecureRide's projected average premium rate aligns with the industry average, indicating a realistic pricing strategy)
• Example 2: Conduct a thorough analysis of loss ratios and claim settlement ratios in the auto insurance industry to estimate SecureRide's potential expenses for claims payouts. (e.g., SecureRide projects a 70% claim settlement ratio, based on industry benchmarks, to ensure adequate reserves for potential claims)
• Example 3: Evaluate potential risks and their financial implications, such as increased competition, supply chain disruptions, or changing market conditions. (e.g., A 5% increase in the price of coffee beans could lead to a 2% decrease in CozyCorner's net profit margin)

   7.1. Supporting Documents

 Includes any relevant documentation that supports the information presented in the business plan, such as resumes, financial projections, market research data, and permits or licenses.

   7.2. Glossary of Term

 Provides definitions for industry-specific terms used throughout the business plan to ensure reader comprehension.

   7.3. References and Resources

Lists any sources or resources referenced during the preparation of the business plan, including industry reports, market research data, and relevant publications.

• Example: SecureRide's founders demonstrate their commitment to the business by investing a significant portion of their personal funds into the company's initial capital. They are also willing to personally guarantee loans and secure necessary insurance licenses and certifications, showcasing their dedication and belief in SecureRide's success.

How do I start an insurance agency?

To start an insurance agency, you'll need to obtain the necessary licenses and certifications, develop relationships with insurance carriers, determine your target market and insurance specialties, establish an office or online presence, create a marketing strategy, and hire and train staff.

How can I attract clients to my insurance agency?

To attract clients, develop a strong online presence and professional website, network with other professionals and businesses in related industries, offer valuable content through blog posts or educational resources, utilize social media platforms, and provide exceptional customer service.

What types of insurance should my agency offer?

The types of insurance your agency should offer may vary based on your target market and expertise. Consider offering common insurance lines such as auto, home, life, health, business, and specialty coverages based on the specific needs of your clients.

How can I stay updated with the latest insurance trends and regulations?

Stay updated with the latest insurance trends and regulations by joining industry associations, attending relevant conferences or seminars, participating in continuing education programs, subscribing to industry publications, and actively engaging with insurance carriers and professional networks.

How can I build trust and credibility as an insurance agency?

Build trust and credibility by providing transparent and reliable insurance information, maintaining strong relationships with reputable insurance carriers, offering personalized coverage recommendations, being responsive to client needs and inquiries, and being actively involved in the community you serve.

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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How to Start an Insurance Company

ON THIS PAGE

• 15 Steps To Start a Insurance Company

How Big is the Insurance Company Industry?

What are the key segments of the insurance company industry, what external factors affect the insurance company industry, who are the key competitors in the insurance company industry, what are the key customer segments in the insurance company industry, what are the key costs in the insurance company industry.

• What are the Typical Startup Costs for a new Insurance Company?
• Additional resources in the Insurance Company Industry

If you’re looking to start an insurance company, you’ve come to the right place since we’re going to show you exactly how to do it.

We’ll start with key insurance company industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting an insurance company, but succeeding in it!

Before we continue, here’s where you can access your insurance business plan template  since having a plan will be key to your success.

Download our Ultimate Insurance Business Plan Template here

15 Steps To Start a Insurance Company:

Starting an insurance company can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful insurance company.

1. Choose the Name for Your Insurance Company

The first step to starting an insurance company is to choose your business’ name.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your insurance company:

• Make sure the name is available: Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also, check to see if a suitable domain name is available.
• Keep it simple: The best names are usually ones that are easy to remember, pronounce, and spell.
• Think about marketing: Come up with a name that reflects the desired brand and/or focus of your insurance company.

2. Determine the Type of Insurance Company You Will Launch

When determining the type of insurance company to launch, consider your expertise, resources, market opportunities, and the specific insurance needs of your target audience.

Here are some common types of insurance companies you can consider:

• Life Insurance Company: Offer life insurance policies that provide financial protection to policyholders’ beneficiaries in the event of their death. This includes various types of life insurance, such as term life, whole life, and universal life insurance.
• Property and Casualty Insurance Company: Provide insurance coverage for property (e.g., homes, businesses) and liability (e.g., auto, general liability) risks. This category includes homeowners insurance, auto insurance, and business insurance.
• Health Insurance Company: Specialize in health insurance policies that cover medical expenses, hospitalization, and healthcare services. Health insurance can include individual plans, group plans, or government-sponsored programs.
• Travel Insurance Company: Offer insurance products that provide coverage for unexpected events during travel, such as trip cancellation, medical emergencies abroad, and lost luggage.
• Pet Insurance Company: Focus on pet insurance policies that cover veterinary expenses for pet owners, including illness, accidents, and wellness care.

3. Develop Your Insurance Company Plan

One of the most important steps in starting an insurance company is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample insurance business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

• Executive Summary: This section should summarize your entire business plan so readers can quickly understand the key details of your insurance company.
• Company Overview: This section tells the reader about the history of your insurance company and what type of insurance company you operate. For example, are you a life insurance company, travel insurance company, or pet insurance company.
• Industry Analysis: Here you will document key information about the insurance industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis: In this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
• Competitive Analysis: Here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product: Determine and document what products/services you will offer.
• Prices: Document the prices of your products/services.
• Place: Where will your business be located, and how will that location help you increase sales?
• Promotions: What promotional methods will you use to attract customers to your insurance company? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization, and/or social media marketing.
• Operations Plan: In this section, you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team: This section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your insurance company make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

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4. choose the legal structure for your insurance company.

Next you need to choose a legal structure for your insurance company and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the insurance company and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start an insurance company together. The partners share in the profits and losses of the business. The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for an insurance company include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for an insurance company is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations, including the number of shareholders they can have, among others.

Once you register your insurance company, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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5. Secure Startup Funding for Your Insurance Company (If Needed)

In developing your insurance company plan, you might have determined that you need to raise funding to launch your business.

If so, the main sources of funding for a insurance company to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a insurance company that they believe has high potential for growth.  

6. Secure a Location for Your Business

Finding the right space for your insurance company is essential for creating a professional and accessible environment for clients and employees. When searching for the ideal office space, consider the following factors:

• Location: Choose a location that is easily accessible to your target clients and employees. A central or well-known business district can enhance your company’s image and accessibility.
• Office Size: Determine the size of the space you need based on your current staff and expected growth. Ensure that the space allows for private offices, meeting rooms, a reception area, and common workspaces.
• Accessibility: Ensure that the office space is wheelchair accessible and complies with disability access regulations. Easy access to elevators and ramps is important for all clients and employees.
• Parking: Assess parking availability for both clients and employees. Convenient and secure parking can be a significant selling point for your location.
• Security: Consider the security of the building and surrounding area. Look for spaces with security systems, access controls, and well-lit parking areas to ensure the safety of clients and employees.
• Proximity to Clients: If you have a specific target market, consider being near businesses or organizations that cater to your client base. This can increase your visibility and potential referrals.

Take your time to visit potential office spaces, assess their suitability, and negotiate lease terms that meet your needs. The right office space can contribute to the success and professional image of your insurance company.  

7. Register Your Insurance Company with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.  

8. Open a Business Bank Account

It is important to establish a bank account in your insurance company’ name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use.
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address).
• Complete the bank’s application form and provide all relevant information.
• Meet with a banker to discuss your business needs and establish a relationship with them.

9. Get a Business Credit Card

You should get a business credit card for your insurance company to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.  

10. Get the Required Business Licenses and Permits

Starting an insurance company is a complex and highly regulated endeavor. The specific licenses and permits you need will depend on your location, the types of insurance you plan to offer, and the regulatory environment in your region.

However, here are some common licenses and permits you may need to start an insurance company:

• Insurance Producer License: To sell insurance policies, you and your agents (producers) will typically need an insurance producer license. The requirements and licensing process vary by state and may include pre-licensing education, passing an examination, and background checks.
• Business Entity License: If your insurance company is a legal entity (e.g., corporation, LLC), you may need a separate business entity license or registration, in addition to individual producer licenses.
• Insurance Company License: You will need a specific license to operate as an insurance company, issued by your state’s insurance regulatory authority. This license may also be referred to as a “carrier” or “insurer” license.
• Insurance Agency License: If you plan to operate as an insurance agency or brokerage, you may need an agency license in addition to individual producer licenses.
• Surplus Lines License (if applicable): If you intend to sell surplus lines insurance (insurance that is not available through standard insurers), you’ll need a surplus lines license. This type of insurance is subject to specific regulations.
• Non-Resident Licenses (if operating in multiple states): If you plan to conduct insurance business across state lines, you may need non-resident licenses in the states where you operate.

Depending on the type of insurance company you launch, you will have to obtain the necessary state, county and/or city licenses.  

11. Get Business Insurance for Your Insurance Company

Other business insurance policies that you should consider for your insurance company include:

• General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance: This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.  

12. Buy or Lease the Right Insurance Company Equipment

Running an insurance company involves managing various administrative and technological aspects.

Here is a list of equipment and tools you may need to effectively run your insurance business:

• Computers and Laptops: High-quality computers and laptops for your staff to perform daily tasks, including underwriting, policy management, and client communication.
• Internet Connection: A reliable high-speed internet connection is essential for accessing online resources, communicating with clients, and managing digital documents.
• Office Furniture: Desks, chairs, workstations, and filing cabinets for a comfortable and organized office environment.
• Telephones and Communication Systems: Phone systems, headsets, and conference call equipment for effective communication with clients, agents, and other stakeholders.
• Printers and Scanners: Multi-function printers and scanners for creating physical documents, scanning contracts, and producing hard copies of insurance policies.

The specific equipment you need may vary depending on the size and scope of your insurance company, your specialization, and your operational preferences. Invest in quality technology and tools to streamline your business operations, enhance client services, and maintain regulatory compliance.  

13. Develop Your Insurance Company Marketing Materials

Marketing materials will be required to attract and retain customers to your insurance company.

The key marketing materials you will need are as follows:

• Logo: Spend some time developing a good logo for your insurance company. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website: Likewise, a professional insurance company website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts: Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn, and/or other social media networks will help customers and others find and interact with your insurance company.

14. Purchase and Setup the Software Needed to Run Your Insurance Company

Running an insurance company requires a variety of software tools to manage policies, claims, client relationships, and administrative tasks efficiently.

Here is a list of essential software categories and specific software applications commonly used by insurance companies:

• Agency Management System (AMS): AMS software helps manage client information, policies, and commissions, streamlining agency operations.
• Underwriting Software: Specialized underwriting software assists in evaluating risk, pricing policies, and making underwriting decisions.
• Rating Engines: Rating engines automatically calculate premium rates based on underwriting criteria and policy details.
• CRM Software: CRM systems help manage client interactions, track leads, and improve customer relationships.
• Claims Processing Software: Claims processing software helps insurance companies efficiently handle and track claims from initial submission to resolution.
• Loss Control Software: Loss control tools assist in risk assessment and provide recommendations for loss prevention.
• Fraud Detection and Prevention: Software for detecting and preventing insurance fraud through data analytics and pattern recognition.

The specific software applications you choose will depend on the size, focus, and operational needs of your insurance company. Additionally, consider regularly updating your software to stay competitive and meet changing industry demands.  

15. Open for Business

You are now ready to open your insurance company. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.  

The insurance company industry has grown steadily, at a rate of 2.7% over the past five years. The 3,232 insurance companies in the U.S. collectively generated $600.8 billion in revenue last year.

The main segments of the insurance industry are:

• Auto insurance generates the largest percentage of industry revenue.
• Homeowners insurance accounts for about 15% of total revenue
• Workers compensation and other business-related insurance accounts for about 20% of revenue
• The balance of industry revenue comes from fire insurance, other liability and other types of insurance.

A number of factors affect the performance of the insurance company industry. These drivers include:

• Number of motor vehicle registrations – The increase of vehicle registrations also means higher demand for automotive insurance policies. This year, motor vehicle registrations are rising.
• Homeownership rate – Growth in the homeowner’s insurance segment is dependent on new home purchases. This year, homeownership in the US is expected to decline.
• Natural disaster index – A high natural disaster index increases the likelihood of consumers acquiring insurance policies. However, natural disasters do occur frequently, which typically requires high pay-out for this segment.
• Yield on 10-year Treasury note – Higher interest rates mean greater income for insurance companies. But this year, interest rates on 10-year treasury notes will be decreasing.
• Regulation for the Property, Casualty and Direct Insurance Industry – State regulations affect insurance companies’ profitability. However, the regulatory environment is expected to remain stable this year.
• S&P 500 – When S&P 500 is bullish, there is higher dividend from investments for insurers. The S&P 500 is expected to increase this year.
• State Farm Mutual Automobile Insurance Company
• Allstate Insurance Company
• Liberty Mutual Group Inc.
• The Travelers Companies Inc.

The customer segments in the Insurance Company industry are the commercial and private markets.  

Loss and loss adjustment expenses – At over 60%, Loss and loss adjustment expenses are by far the largest cost for industry operators.

Wages – Less than 10% of the industry revenue this year will be accounted for wages and is expected to decline in the next five years.

Other – Purchases make up a small portion of the current industry revenue; while rent, utilities, and marketing expenses account for about 3%, and depreciation is 1%.  

What are the typical startup costs for a new Insurance Company?

Starting an insurance company will cost you around $5,000 to $50,000 or more.  

Insurance Business Plan Example PDF

Download our insurance business plan pdf here. This is a free insurance business plan example to help you get started on your own insurance plan.  

Additional resources in the Insurance Industry

For additional information on the travel agency market, consider these industry resources:

• US Federal Reserve : www.federalreserve.gov
• Property Casualty Insurers Association of America: www.pciaa.net
• Insurance Information Institute: www.iii.org
• American Land Title Association: www.alta.org
• Insurance Agency Mavericks: www.insuranceagencymavericks.com

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Insurance Company Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Financial Service Industry » Insurance Company

Are you about starting an insurance company ? If YES, here is a complete sample insurance company business plan template & feasibility report you can use for FREE .

If you are considering starting an insurance company, then you would be required to get an insurance license from the organization regulating the insurance industry in your country before you are permitted to start your own insurance company. In the United States of America, it is The National Association of Insurance Commissioners that regulates the industry.

What It Takes to Start an Insurance Company?

No doubt, the process of obtaining an insurance license might not come easy; and this is depending on the part of the world you live in. Any applicant of insurance license would be required to meet certain laid down criteria and sometimes it is the bureaucracy involved in the whole process that makes it difficult to obtain.

As earlier stated, you wouldn’t be allowed to start your own insurance company without first obtaining the license required. For you to be eligible to apply for an insurance license, you must first write and pass some licensure examinations.

If you are serious and determined, you could write and pass the exam in one sitting, but if not, then you should be ready to take the exams over and over again. The bottom line is that these exams do not come  cheap; so you must prove your worth before you can be issued a license.

Aside from the money you would need to rent an office, get the business registered, obtain the required business permits and license and then make provision for the payment of your staff for at least 6 months or more, you should also be ready to meet the financial requirement / capitalization as stated by the insurance regulating body in your country.

Just like the banking industry, the insurance industry is yet another industry that requires that you must have a certain amount of capital base before you can successfully swing into full operation- usually the money required is in the range of several thousands of dollars.

This is so because one of the challenges insurance companies usually face is the inability to pay claims. So in order to cub this challenge, anyone looking towards starting an insurance company must meet the set financial requirement / capitalization.

A Sample Insurance Company Business Plan Template

1. industry overview.

The insurance industry is wide and global in nature; there are numerous aspects anyone interested in starting an insurance company could choose to specialize in. For instance; in the United States of America and even in Canada, pet insurance is one aspect of insurance that is gradually opening up and it is interesting to state that it is a very promising market.

Anyone looking towards starting an insurance company has the option to choose an area of insurance to specialize in or they could choose to start a general insurance company; an insurance company that is involved in the selling of life insurance policy, health insurance policy, auto / car insurance policy and liability insurance amongst others.

The united states of America has the largest insurance market in the world as indicated by the volume of premium payments.

Statistics shows that in 2013 alone, out of the total sum of 4.640 trillion US dollars of gross premiums written in on a global scale, 1.274 trillion US dollars which translate to 27% were actually written in the United States of America. This goes to show how big the insurance industry is in the United States of America.

In a report released by McKinsey & Company, it was estimated that the insurance industry in the United States incurs about 13 billion US dollars annually in unnecessary regulatory costs under the state – based regulatory system

In the insurance industry, it is only the smallest insurers that exist as Single Corporation. It is the practice in the insurance industry for most major insurance companies to exist as insurance groups; they usually partner with holding companies.

This practice has loads of benefits and as a matter of fact insurance groups are known to survive the turbulence in the insurance industry year after year and the survivability of single insurance companies is pretty low.

In some countries trust is one of the key factors that hamper the growth of the insurance industry. Beyond that, the insurance company is still growing and as long as the economy of the country continuous to grow; the insurance company will usually tag along.

The fact that there are several insurance companies and insurance brokerage firms does not in any way stop an investor or entrepreneur who wants to venture into the insurance industry. If you know what you want and you have the right strategy, you will definitely make good success out of the insurance industry.

People are encouraged and motivated to venture into the insurance industry because of the profitability of the industry, and also because of the point that despite the fact that the industry is saturated, there are still more rooms to create your own unique insurance products or even partner with bigger insurance companies if you are able to successfully build your own insurance company to a certain success level.

It is also important to state that if you are an investor who is interested in owning a portfolio in the insurance industry, you may not need to go all the way to write and pass the required insurance exams and obtain the necessary insurance certifications.

All you need to do is to provide the finance and connections needed and then get people who have the required paper / documents to partner with in starting your insurance company.

Just like most business, the insurance industry is pretty open for as many people that are interested in the industry as long as you have what it takes to run an insurance firm. Even if you don’t have the finance and other requirements for starting an insurance company, you can come into the industry by starting – out as an accredited insurance broker.

2. Executive Summary

Mutual Trust Insurance PLC is a general insurance company was incorporated under the United States’ law as a private Limited Liability Company but has the plan in the nearest future to transform in a public limited liability company.

This is so as to enable us get listed in the New York Stock Exchange. We will launch the business in heart of New York City – New York where we will have our headquarters and later spread to other major cities in the United States of America.

Mutual Trust Insurance PLC was established with the sole mandate to conduct insurance business in a highly professional, ethical and customer driven approach. We are aware that businesses this day require diverse and sophisticated approaches. This is why we will position our insurance firm to offer a wide range of insurance products to our target market.

We are well prepared and equipped to compete in the highly competitive insurance market in the United States, which is why we have decided to start out by selling various insurance policy covers such as Life and Annuities Insurance, Health / Medical Insurance, Car / Vehicle Insurance, Pet Insurance, Agricultural Insurance,

Aviation Insurance, Financial Reinsurance, Guaranteed Asset Protection Insurance, Group Insurance, Inland Marine Insurance / Marine Insurance / Shipping Insurance, Travel Insurance, Liability Insurance / Professional Liability Insurance and Property and Casualty Insurance et al.

At Mutual Trust Insurance PLC, our client’s best interest come first, and everything we do is guided by our values and professional ethics. We will ensure that we remain committed to professionalism, integrity, innovation and excellent customer services. We will also ensure that we only hire employees who are well experienced to help us drive the business.

We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our clients.

Mutual Trust Insurance PLC is poised at all times to demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

Mutual Trust Insurance PLC is founded by a group of New York based investors led by Dr. Wilcox Carrington and Mrs. Ruth Ferguson.

The organization will be managed by both of them while other partners will be at the background. Dr. Wilcox Carrington graduated from University of California – Berkley (First Degree), Brock School of Business at Stamford University (MBA), and University of Harvard (PhD.).

He has extensive experience in a senior managerial role with some of the world’s leading insurance companies. He will be bringing is wealth of experience and expertise to help grow Mutual Trust Insurance PLC to become a world class insurance company.

3. Our Products and Services

Mutual Trust Insurance PLC is going to offer varieties of insurance products and services within the scope of the insurance industry in the United States of America.

Our intention of starting our insurance company is to make profits from the United States’ market and we will do all that is permitted by the law in the U.S. to achieve our aim and business goals. Our products and service offering are listed below;

• Life and Annuities Insurance policy cover
• Health / Medical Insurance policy cover
• Car / Vehicle Insurance policy cover
• Pet Insurance policy cover
• Agricultural Insurance policy cover
• Aviation Insurance policy cover
• Financial Reinsurance
• Guaranteed Asset Protection Insurance policy cover
• Group Insurance
• Inland Marine Insurance / Marine Insurance / Shipping Insurance
• Travel Insurance policy cover
• Liability Insurance / Professional Liability Insurance
• Property and Casualty Insurance policy cover
• Consulting and Advisory Services (Within the Insurance Business)

4. Our Mission and Vision Statement

• Our vision as an insurance company first and foremost is to make available a wide range of insurance products at an affordable price in the United States of America.
• Our mission is to be listed as amongst the top 20 insurance company based on revenue generations (premium collections et al), trust and ease of doing business.
• We will ensure that our clients get their claims as at when due without unnecessary delays.

Our Business Structure

Mutual Trust Insurance PLC will build a solid business structure that can support the growth of our insurance business. We will ensure that we hire competent hands to help us build the business of our dream.

The fact that we want to become one of the leading insurance business brand in the industry in the whole of the United States of America makes it highly necessary for our organization to deliberately build a well – structured business from the onset. Below is the business structure that we will build Mutual Trust Insurance PLC;

• Chief Executive Officer

Legal Secretary

Head of Premium Collections

Head of Claims

Admin and HR Manager

• Marketing Executive
• Customer Care Officer

Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Office – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for providing direction for the business
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board
• Responsible for drawing up contracts and other legal documents for the company
• Produces information by transcribing, formatting, inputting, editing, retrieving, copying, and transmitting text, data, and graphics; coordinating case preparation.
• Provides historical reference by developing and utilizing filing and retrieval systems; recording meeting discussions; maintaining transcripts; documenting and maintaining evidence.
• Responsible for the collection of premiums for the organization
• Work with software developers to develop efficient and easy to use premium collection software
• Advises the organization from time to time on how to improve and increase premium collections
• Collaborates with the head of sales and marketing to ensure that our insurance policies holders does not allow their policies to lapse
• Follows up on premium payment and send reminders from time to time to our policy holders to pay their premium
• Responsible for resolving any premium issues with our bank and policy holders.
• Responsible for the payment of claims to policy holders that files in for claims
• Ensures that proper investigations are carried out before claims are paid
• Reviews the organizations’ claims policy from to time to time to make it efficient and measure up with best practices in the industry.
• Keeps proper record of claims that are paid out by the organization
• Supervises the claims department
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defining job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.

Marketing / Sales Executive

• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Help increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with students on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the school coordinator in an effective and timely manner
• Consistently stays abreast of any new information on the schools’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to students when they make enquiries
• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Receives parcels / documents for the organization
• Handles enquiries via e-mail and phone calls
• Distributes mails in the organization
• Handles any other duties as assigned by the Admin / HR manager

6. SWOT Analysis

Mutual Trust Insurance PLC engaged the services of a core professional in the area of business consulting and structuring to assist the firm in building a well – structured insurance company that can favorably compete in the highly competitive insurance industry / market in the United States.

Part of what our team of business consultants did was to work with the management of the organization in conducting a SWOT analysis for Mutual Trust Insurance PLC. Here is a summary from the result of the SWOT analysis that was conducted on behalf Mutual Trust Insurance PLC;

It is compulsory for our business to have our core strength lies in the power of our team; our workforce. We have a team that can go all the way to give our clients value for their money.

We are well positioned and we know we will attract loads of clients from the first day we open our doors for business. We also have an efficient and effective customized software application that will help carry out seamless insurance activities.

As a new insurance company in the United States, it might take some time for our organization to break into the market; that is perhaps our major weakness.

• Opportunities:

The opportunities in the insurance industry is massive and we are ready to take advantage of any opportunity that comes our way which is why we are going to be offering a several insurance policies / packages.

One thing is certain, a weak economy is one major factor that is limiting growth opportunities for the insurance industry. Come to think of it, there is hardly any business or investment opportunity that does not come with its own fair share of threats and challenges.

This is why most organization conduct risk assessment on a regular basis so as to enable them produce strategies that will help them stay afloat in the industry.

Another major threat and challenges that we are likely going to face when we start our insurance business is of course the arrival of another insurance company in same location where ours is located and perhaps sell same insurance policy covers as we do.

For sure if we have been able to come up with workable and winning strategies that will help us outsmart our competition in the location where our insurance company is going to be located. With that, we are likely not going to struggle to grow our insurance company and also retain some of the best hands under our employment.

Over and above, just as in any other business and investment vehicles, economic downturn, unstable financial market, natural disasters and unfavorable government economic policies can hamper the growth and profitability of an insurance company.

7. MARKET ANALYSIS

• Market Trends

One common trend is that, in the insurance industry, it is only the smallest insurers that exist as Single Corporation. It is the practice in the insurance industry for most major insurance companies to exist as insurance groups; they usually partner with holding companies.

This is why you may hardly find an insurance company that is not into the sale of various insurance policy covers ranging from motor vehicle insurance policy to pet insurance policy cover to marine insurance policy cover et al.

Another trend in the insurance industry is the creativity in premiums collections. Most insurance companies know that the survival of their business lies in the regular payment of premiums which is why they have to go all the way to put system and processes in place that will help the collect premiums from the policies holders with ease.

If you keep tab with successful insurance companies you will realize that they leverage on technology (internet and software applications et al) in running their business.

8. Our Target Market

Although Mutual Trust Insurance PLC will initially serve small to medium sized market in and around New York City – New York, but that does not in any way stop us from growing to be able to compete with the leading insurance companies selling our insurance policies in the cities in the United States.

We hope to someday merge or acquire other smaller insurance companies and expand the sales our insurance products and business beyond the shores of the United States of America.

As a standard insurance company, Mutual Trust Insurance PLC have a range of insurance policy covers and we will also work hard to continue to add more insurance covers that are on sale in the insurance market in the United States of America hence expanding the scope of our target market from time to time.

Our target market cuts across people of different class and people from all walks of life, local and international organizations as well. We are coming into the industry with a business concept that will enable us sale of insurance policies to the highly placed people and companies in the country and at the same to the lowly placed people and smaller businesses.

In other words, our target market is the whole of the United States of America and subsequently other parts of the world. Below is a list of the people and organizations that we have specifically design our products and services for;

• Students, Young Adults, The Elderly and Children et al
• Businesses and Entrepreneurs
• Blue Chips Companies
• Corporate Organizations
• Manufacturers and Distributors
• Real Estate Owners, Developers, and Contractors
• Research and Development Companies
• The Government (Public Sector)
• Schools (High Schools, Colleges and Universities)
• Sport Organizations
• Entrepreneurs and Start – Ups

Our competitive advantage

A close study of the insurance industry reveals that the market has become much more intensely competitive over the last decade.

As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in the insurance industry. We are aware of the stiffer competition and we are well prepared to compete favorably with other leading insurance companies in the United States.

Mutual Trust Insurance PLC might be a new entrant into the insurance industry in the United States of America, but the management staffs and board members are considered gurus. They are people who are core professionals and licensed and highly qualified insurance practitioners in the United States. These are part of what will count as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups insurance companies) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Mutual Trust Insurance PLC is established with the aim of maximizing profits in the insurance industry and we are going to go all the way to ensure that we do all it takes to sale our insurance products to a wide range of clients and also ensure that we don’t struggle to collect premiums on a regular basis.

Mutual Trust Insurance PLC will generate income by selling the following insurance policy covers to both individuals and organizations;

10. Sales Forecast

As long as there are people living in the United States of America and business starting and growing in the U.S., they will always purchase one insurance policy cover or the other.

We are well positioned to take on the available market in the U.S. and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base beyond New York City, New York to other states in the U.S. and even the global market.

We have been able to critically examine the insurance market and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in New York.

Below is the sales projection for Mutual Trust Insurance PLC, it is based on the location of our insurance company and the wide range of insurance products that we will be offering;

• First Year-: $500,000
• Second Year-: $1, 500,000
• Third Year-: $3,000,000

N.B: This projection is done based on what is obtainable in the industry.

• Marketing Strategy and Sales Strategy

Starting and running an insurance company requires aggressive marketing which is why you have insurance sales men and women are always on your neck to market / sell one insurance cover or the other especially if you live in the United States of America.

So to stay afloat in the insurance industry, you must be ready to spend good cash in marketing, advertising and promoting your insurance products. Your marketing and advertising departments must regularly come out with new innovations and products that can catch the attention of your potential clients.

Which is why when we were drafting our marketing ideas and sales strategies for our insurance company, we ensured that we created a compelling personal and company’s profile that include the profile of our board of directors and management team.

The truth is that if you have honest, trustworthy and successful professional in your board, customers can easily trust you with their hard earned money. In some countries trust is one of the key factors that is hampering the growth of the insurance industry.

Nobody wants to buy insurance policies, pay premium and not certain if they can get claims when the time comes. Here are some of the platforms we will utilize to market our insurance policies;

• Introduce our business (insurance policy covers) by sending introductory letters alongside your brochure to individuals, investors and corporate organizations
• Advertise our business in relevant business magazines (insurance magazines and business related magazines) and be available for insurance related talk shows and interactive sessions on TV and Radio stations)
• List our insurance company on local directories / yellow pages (both online and offline)
• Attend expos, seminars, and business fair to network and sell our insurance policy covers
• Leverage on the internet to promote our insurance business / insurance policy covers
• Join local chambers of commerce around us with the main aim of networking and marketing our insurance products.
• Engage the services of marketing executives and sales agent to carry out direct marketing of insurance products.

11. Publicity and Advertising Strategy

The insurance business just like any other business requires media hype to get people to buy into the brand. We are aware that our brand has to do with the way people perceive our organization to be which is why we are going to be deliberate when it comes to communicating and promoting our brand.

In promoting and advertising our brand and insurance products, we are going to leverage on both print and electronic media. As a matter of fact, it is cost effective to use social media platforms to promote our brands, besides it is pretty much effective.

Here are the platforms we will leverage on to create brand awareness of your insurance company and to promote our insurance products in the marketplace;

• We will place adverts on national TV stations, Radio Stations and Newspapers / Magazines
• We will run our own special TV program (insurance based program)
• We will sponsor relevant community programs
• We will leverage on the internet and social media platforms like; Instagram, Facebook , Badoo, YouTube, Twitter et al to promote and advertise of insurance products
• We will install our Bill Boards in strategic locations all around New York City – New York and other cities in the U.S.
• We will engage in road show from time to time to create awareness of our insurance company and to sell our products
• We will distribute our fliers and handbills to targeted areas from time to time
• We will send out introductory letters to multinationals, embassies, and diaspora organizations and networks in and around New York City
• We will encourage the use of word of mouth especially from loyal customers
• We will ensure that all our vehicles are branded with our company’s logo.

12. Our Pricing Strategy

When it comes to pricing products in the insurance industry, there is an established trend and in most cases it is determined by the risk involved in the products / insurance policy covers. The calculation is usually done by experts.

Despite the fact that there are expected price standard for various insurance policy covers, one of the easiest ways of getting into the market is to sell your insurance products a little bit below the industry average and that is exactly what we are going to do.

• Payment Options

There is the need to have several payment options. At Mutual Trust Insurance PLC, our payment policy will be all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that we will make available to our clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft
• Payment with cash
• Payment via mobile money platforms

In view of the above, we have chosen banking platforms that will help us achieve our plans with little or no itches.

13. Startup Expenditure (Budget)

When it comes to starting an insurance company, you should be aware that the cost is in the two fold; the cost of setting up the office structure (including branches) and of course your capital base / capitalization. In essence, the nature and size of the insurance company you are looking towards starting will determine the amount you are expected to raise.

As regard the cost of setting up the office structure, your concern should be to secure a good office facility in a busy business district; it can be expensive though, but that is one of the factors that will help you position your insurance company to attract the kind of customers you would want to do business with.

These are the key areas we will spend the bulk of our start – up capital on;

• The Total Fee for incorporating the Business – $750.
• The budget for insurance policies, permits and license – $10,000
• The Amount needed to acquire a suitable Office facility in a business district in New York City with 6 months’ rent up – front (Re – Construction of the facility inclusive) – $50,000.
• The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $5,000
• The Cost of Launching our official Website – $600
• Budget for paying at least 10 employees for 3 months and utility bills – $200,000
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
• Capital Base – 1 Million Dollars
• Miscellaneous – $10,000

Going by the report from the research and feasibility studies conducted, we will need about 1.2 Million U.S. Dollars to set up a small scale but standard insurance company in the United States of America.

Generating Funding / Startup Capital for Mutual Trust Insurance PLC

Mutual Trust Insurance PLC is going to start as a private Limited Liability Company but with a plan in the nearest future to transform in a public limited liability company so as to enable us get listed in the New York Stock Exchange. In essence, the business will be financed by Dr. Wilcox Carrington, Mrs. Ruth Ferguson and other members of the partnership.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $700,000 (from every member of the partnership with the bulk of the money coming from the lead partners Dr. Wilcox Carrington and Mrs. Ruth Ferguson). We are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

It is easier for businesses to survive when they have steady flow of business deals / customers patronizing their products and services. We are aware of this which is why we have decided to sell a wide range of insurance products to both big and small clients, individual clients and corporate clients as well.

We know that if we continue to sell our insurance products and continue to collect premiums on a regular basis, there will be steady flow of income for the organization. Our key sustainability and expansion strategy is to ensure that we only hire competent employees, create a conducive working environment and employee benefits for our staff members.

In the nearest future, we will explore the options of either merging with other insurance company or acquire one or more insurance companies in order for us to increase our market share. We know that if we implement our business strategies, we will grow our insurance business beyond New York City, New York to other states in the U.S in record time.

Check List / Milestone

• Business Name Availability Check:>Completed
• Business Incorporation: Completed
• Application for Insurance License: Completed (Collected)
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of All form of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Generating part of the start – up capital from the founders: Completed
• Applications for Loan from our Bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the industry: In Progress

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How to make a business plan for an insurance company?

How to make a business plan for an insurance company? If you are about to launch an insurance company, now is the time to find out how to make an insurer’s business model . Nowadays it doesn´t matter what niche a company is in since all of them can put together their business plan from a template that may change according to the goals of every one of them.

But before starting with the entire business plan process, it will be essential that you acquire an insurance license that regulates the insurance industry in the country where you are located. You can find information on how to get this license online.

In this post, we want to focus on how to develop a business plan for your insurance company, and we will do it step by step. 

Business plan: What does it take to open an insurance agency?

An insurance company must be 100% ready to face any challenge that may arise. Therefore, a business plan will be the most practical option to be able to fulfill the company´s goals and the established financial requirements.

This would be the template you should follow if you want an effective insurance company strategic plan: 

Consider the industry´s overview 

The insurance area turns out to be very wide. So, to start in this market, you need to be aware of several things. Likewise, to start with an insurance company you must determine in which area you´ll specialize, although you could also start with an insurance company in general.

There are insurance companies that sell policies that cover life, liability, cars, and much more. 

Make an executive summary

The executive summary should state what you are looking for when you have an insurance company today, and what you expect from it in the future. It should also show what your approach is when working in the insurance sector. For example, the strategic end of an insurance company must be clear to position itself and in turn offer a diverse range of products for the target audience.

So, if you have this same mindset, we are on the right track. Anyway, in this executive summary, it is necessary to make clear what standards will be held to meet the customer’s needs.

Show products and services 

It´s important to highlight what services you can offer as an insurance company. In this way, you can profit in the market that is taken by this sector, and in turn, you will be able to achieve your purposes and business goals.

Your products of offers and services could be formed from the following examples:

• Health insurance policy.
• Life insurance policy. 
• Auto insurance policy. 
• Pet insurance policy. 
• Aviation insurance policy. 
• Agricultural insurance policy. 
• Property and casualty insurance policy. 
• Inland marine insurance. 
• Advisory services regarding insurance plans. 

Set the vision and mission of the company

What is the vision of your insurance company? This point is usually important for any business plan. In the case of an insurance company, the idea is to offer a wide variety of products and services at an affordable price. Another important point within the mission will be to be one of the main insurance companies in your country.

These are very clear ideas that have worked for the most prestigious insurance companies today. Similarly, both the vision and mission of your company depend on the established goals.

Show your commercial structure 

The consolidation of the vision and mission will depend mostly on the business structure of the insurance company. When you have a strong structure in place, it can add significant growth to your business.

Then again, to become a leading brand in the insurance market, the most appropriate thing is to have a commercial structure such as the one mentioned below so that each one fulfills an optimal function:

• Executive Director.
• Legal secretary.
• Head of claims.
• Head of collections.
• Human resources administrator or manager.
• Marketing executive.
• Accountant.
• Customer service staff.
• Reception officer. 

Carry out the SWOT analysis

These are the elements that make up the SWOT analysis : 

• Strength An insurance company must have team power as a central force since they must have the ability to meet the needs of their clients to add value to their money. When a business is well-positioned it can easily attract a greater number of customers. The insurance service should not be interrupted for it to be of quality, which is why today many companies have a fully customized software application so that communication with the client is continuous.

• Opportunities In the insurance industry, there are many opportunities, it´s important to be prepared to take advantage of them by offering various insurance packages and policies.
• Threat When an economy is weak there can be many limitations to the insurance sector. When investing in a certain business, certain risks are being taken, and that is why risk assessments must be carried out within the business plan to create strategies that allow staying afloat in this highly competitive industry.

Do a market analysis 

In the market analysis, several elements that will be a great determinant for the success of your insurance company must be considered: 

Market trends 

This type of practice has many benefits since, depending on the inconveniences that may arise in the insurance sector, the survival chance of the smaller insurance companies is usually very low. Consequently, it is very rare these days to get an insurer that does not have multiple insurance coverages for sale.

The regular payment of premiums is another of the most visible characteristics for the survival of this type of business, so they must implement systems that allow the collection of premiums to the holders easily. If you have looked at the particularities of the most successful insurance companies, you will surely notice that they take much advantage of the tools offered by the internet.

Target market 

Depending on the goals of having a company dedicated to this sector in the future, it can acquire more companies to expand the sales of its products. By adding a wide variety of products and services, your target market can be expanded significantly.

Your target market can encompass the following groups of people or organizations:

• Young adults.
• Companies and entrepreneurs.
• Corporate organizations.
• First-class companies.
• Manufacturers and distributors.
• Sports organizations.
• Real estate owners.
• Research companies. 

Competitive advantage 

In this way, you can be ready to compete with other insurance companies regardless of whether they are small or leaders.

It does not matter if you are a beginner in this industry, if you have a highly professional team with insurance licenses and are highly qualified, this will be a great competitive advantage. 

Develop a sales and marketing strategy

Insurance companies must be ready to spend a significant amount of money on marketing, and in the marketing department for a good promotion of their products. Just the same through advertising, they must offer innovation to attract the attention of the target audience.

The marketing plan of an insurance company must be based on reliability , and for this, it will be necessary to have a team that can connect with its clients positively so as not to hinder their growth in this industry.

To market your products and services taking into account marketing strategies, these will be some of the most useful platforms:

• Presentation Letters.
• Advertising the business in trade magazines.
• Make use of local directories for your company’s listing.
• Attend seminars and exhibitions for the sale of your insurance policies and establish better contacts. 
• Make leverage online to promote your insurance company.
• Hire the services of marketing experts to improve the marketing of your products and services. 

Have a sales forecast

That is why to make the sales plan of an insurance company you must have in mind the information collected from the analyzes that you have already done previously. In the same way, your sales projection must be in accordance with the location of your company, with the products and services it offers, and with what you want to obtain in the middle of this industry.

To do this, you must keep track of your sales projection for the first year , second year, third year, and so on. 

Within the insurance sales plan forecast, you must also think of two very important elements :

Price strategy 

There is an established trend in setting prices in the insurance industry, and in many cases, it can be determined by the risk involved in insurance policies. 

In general, this math is made by experts in the insurance industry and although there are price standards related to coverage.

One of the best options to enter the market is to sell your products a little below the average price that we find in the industry. 

Payment options 

These are some of the payment options that can be made available to the client: 

• Bank transfers.
• Online bank transfers.
• Bank drafts.
• Mobile money platforms.

Make projections regarding the financial part and costs

• Total fee for the incorporation of the business.
• Budget for insurance policies (permits, licenses, …).
• Cost of office equipment (computers, furniture, printers, security devices, fax machines, much more).
• Website launch cost.
• Budget to hire a specified number of employees. 
• Everything related to the installation of the office or its reconstruction. 
• Capital base.
• Additional expenses (cards, promotions, signage, advertisements, etc.). 

Develop a sustainability and expansion strategy

The idea is that you can keep the constant sale of your insurance policies to generate constant income for the organization. That is why the sustainability and expansion strategy must focus on hiring competent employees, maintaining a pleasant work environment, and providing benefits to all staff .

Regarding expansion within the business plan, the goal may be to merge with other companies or acquire another company that allows you to have more market share. 

Did you like this post?

A business plan is more important than you can imagine because it is the only way you can maintain an established marketing strategy and more assertive projections.

At BluCactus Ontario we have a team of certified professionals, and we can help you create the business plan your insurance company needs.

Contact Us ! And we will gladly assist you.

Quote your project to let us create your Marketing Project to increase your audience and sales today!

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Insurance business strategy

Take action today for immediate impact and sustained advantage in the insurance market.

The insurance industry is undergoing more upheaval than any other. Disruptors include changes in industry regulation, customer behavior, distribution channels, traditional and new competitors and core technologies of production and service.

• Can you quickly and decisively respond to important new challenges and opportunities?
• What will your markets look like, who will be your most important customers and competitors, and how are customer expectations likely to change?
• How can you get closer to customers and better understand their needs?
• Is your business nimble and innovative enough to compete with the mobile companies, internet providers and other new entrants that are making inroads into the market?

Next in insurance 2023 Scenarios for the next year and beyond

Because the trends affecting the insurance industry will continue to manifest longer than in just 2023, this year’s “Next in insurance” is looking beyond just the coming year to the rest of the decade. Change will remain constant and - as was the case with work and customer service models during the pandemic - sometimes be very sudden. But the factors spurring it will remain much the same as they are now:

• The ever-increasing growth of digital channels, wider distribution points via partnerships and embedded options, and enhanced analytics are integrating markets. Policy options will only grow and barriers to entry ease.
• Social responsibility and ESG remain critical. This is about more than maintaining a positive brand and extends to helping clients and society mitigate - even prevent - natural and human catastrophes, cybercrime and other loss incidents.
• Insurance companies can no longer be merely sellers of generic policies. They have to be technology-enabled - not just “digital” - in order to agilely assess and price risk and serve customers in the situations they need, learn about and purchase insurance.

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Accelerating insurance transformation and creating value

Business design.

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• Design operating models to reduce complexity and improve effectiveness.
• Create operational and technology strategies to improve market responsiveness.

Information advantage

• Enhance analytical capabilities and seek new insights to create an information advantage.

Mobilization and execution

• Transform core operations and platforms to improve operating leverage, market agility and operational effectiveness.

Customer impact

• Develop and improve direct distribution capabilities and integrated multi-channel strategies.
• Explore new capabilities that online strategies enable.
• Guide customer-driven innovations and product speed-to-market.

Insurance customer experience: Encouraging curiosity

PwC's Marie Carr and Bruce Brodie talk with PwC advisor Toby Alfred about how insurers can improve the customer experience and consequently their bottom line.

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Types of Business Insurance

How to choose the right business insurance plan, how to get business insurance.

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• Business Insurance

Types of Business Insurance Plans: How to Decide Which Is Right for You

Insurance can help you protect your business from a variety of risks. Some of the most common types of business insurance plans include:

• General liability insurance
• Commercial property insurance
• Business income insurance
• Professional liability insurance
• Workers’ compensation insurance
• Employment practices liability insurance
• Product liability insurance
• Commercial auto insurance
• Commercial umbrella insurance
• Cybersecurity insurance

Understanding how each type of business insurance (also referred to as commercial insurance ) works can help you determine which coverage options you may need.

Key Takeaways

• Business insurance is designed to protect business owners from financial losses associated with a range of covered events.
• Different types include general liability, commercial property, and workers’ compensation insurance.
• Like other types of insurance, business insurance can require you to pay premiums as well as deductibles.
• There are several different varieties of business insurance that you could use to protect your business.
• Purchasing a package policy that includes several different types of coverage is one way to save money on business insurance.

The figures listed above represent the average monthly cost of various small business insurance products, according to Insureon, an online marketplace for small business insurance. The actual cost of insuring a small business may be lower or higher, depending on your unique situation and needs.

1. General Liability Insurance

General liability insurance provides liability coverage if your business is sued. This type of coverage is fairly comprehensive and can protect you against claims stemming from a number of different circumstances.

What risks does it protect against? General liability insurance protects you against lawsuits filed by people outside of your company, such as suppliers or customers.

What costs does it cover? This type of policy can cover the costs of a lawsuit, including settlements paid to claimants and medical expenses related to personal injury claims.

Forgoing general liability insurance could leave your business open to significant losses if you’re sued.

2. Commercial Property Insurance

Commercial property insurance protects your business property against a wide variety of losses. For example, if your property is damaged as a result of a natural disaster or civil unrest, your policy could pay to repair or replace affected assets. A civil authority provision addresses business closures as a result of government actions after a disaster or life-threatening event.

What risks does it protect against? Commercial property insurance covers damage resulting from fire, smoke, wind, hail, civil disobedience, and vandalism .

3. Business Income Insurance

Business income insurance is a type of coverage designed to supplement commercial property insurance. This kind of policy protects you if your business income is interrupted due to property damage .

What risks does it protect against? Business income insurance protects you against missing income associated with the slowdown or suspension of business resulting from damage to property.

What costs does it cover? This type of policy helps to replace lost income from operations.

4. Professional Liability Insurance

Professional liability insurance is liability coverage for losses resulting from perceived mistakes that you made in doing your job. You may purchase this type of insurance to supplement any events not covered by a general liability policy.

What risks does it protect against? Professional liability insurance can protect against lawsuits that may arise as a result of negligence, malpractice , or errors.

What costs does it cover? This type of policy can pay out benefits to cover lawsuit settlements and legal fees.

5. Workers’ Compensation Insurance

Workers’ compensation insurance is a type of liability coverage that protects your business if one of your employees gets injured on the job. State law can determine what types of businesses are required to have workers’ compensation coverage.

What risks does it protect against? Workers’ compensation insurance is designed to cover on-the-job injuries.

What costs does it cover? This type of policy can pay medical bills for injured employees and provide them with income replacement until they’re able to return to work.

6. Employment Practices Liability Insurance

Employment practices liability insurance is intended to protect your business from lawsuits stemming from claims relating to unlawful hiring or employment practices. If you’re sued, your policy could pay legal fees or settlements to claimants.

What risks does it protect against? Employment practices liability insurance can cover a range of situations, including lawsuits filed in connection with wrongful termination , discrimination, sexual harassment, and retaliation.

What costs does it cover? This type of policy can cover legal fees and settlements.

7. Product Liability Insurance

Product liability insurance protects businesses that manufacture or produce tangible products. Specifically, this coverage insures against claims for defective products that cause injury or bodily harm.

What risks does it protect against? Product liability insurance protects your business when someone sues you over a defective product that has caused injury, bodily harm, or death.

8. Commercial Auto Insurance

Commercial auto insurance works similarly to personal car insurance, but it’s designed to protect business vehicles. The type of coverage you need and the coverage limits required can vary from state to state.

What risks does it protect against? Commercial auto insurance protects you against damage related to accidents, vandalism, or theft of company vehicles.

What costs does it cover? This type of policy can cover repair costs, medical bills, legal fees, and settlements.

9. Commercial Umbrella Insurance

Commercial umbrella insurance is designed to cover risks not covered by other types of business insurance. For example, if you’re sued and you’ve maxed out the coverage limits of your general liability policy, an umbrella policy could help to fill the gaps.

What risks does it protect against? Commercial umbrella insurance can help you to minimize financial losses stemming from lawsuit settlements that exceed other business insurance coverage limits. 

What costs does it cover? This type of policy covers legal fees and settlements. 

10. Cyber Liability Insurance

Cyber liability insurance, also known as cybersecurity insurance, is designed to cover liability and property losses relating to the electronic transfer or sharing of data. This type of insurance is becoming increasingly important as more businesses are targeted by hackers and identity thieves online.

What risks does it protect against? Cybersecurity insurance can protect your business if any electronic or digital data is stolen or otherwise compromised.

What costs does it cover? This type of policy can provide liability protection related to lawsuits or cover the cost of upgrading or restoring cybersecurity systems.

Choosing the right business insurance is important because you don’t want to leave certain aspects of your business unprotected or overpay for coverage. Asking the right questions can help you better evaluate your needs.

Some of the most important questions to answer include:

• How many employees does the business have?
• Does the business have a physical location, or does it operate online only?
• Is there any business equipment that will need to be insured?
• What types of liability risks does the business face?
• Are there any vehicles that will need to be covered?
• What would happen if the business is interrupted by a natural disaster or another situation that’s beyond my control?
• Will I need insurance to cover special situations? For example, will it be necessary to buy key person insurance if I plan to sell or transfer the business to my heirs?

It’s also a good idea to weigh other factors when choosing insurance options. For example, you’ll likely need to think about how much liability coverage is appropriate or what type of premiums your business can afford to pay.

Also, consider what types of coverage may be required based on state law or the industry in which you operate. For example, individuals who work in financial services may be required to have professional liability insurance.

Joining a professional association in your field may allow you to unlock business insurance discounts.

If you’re ready to purchase business insurance, it helps to know what to expect. The process isn’t that different from buying other types of insurance. Here’s how to buy business insurance, step by step.

1. Assess Your Business Risk

The types of risk factors that affect your business can determine which types of business insurance you might need.

For example, say that you run an HVAC repair business. You have 10 employees, eight of whom drive work vans to customers’ homes or businesses. In that case, it would make sense to have a commercial automobile policy in place to insure those vehicles.

What if you have no employees and run your business solo? You may not need an auto policy if you drive your own vehicle for work and are covered by personal car insurance. And workers’ compensation coverage may not be necessary, either.

Looking at your business through the lens of risk can help you narrow the types of insurance coverage that may be appropriate and what you can do without.

2. Understand What’s Covered

By now, you should be familiar with the different types of business insurance. When putting together a policy, it’s helpful to know two things:

• What’s covered
• What’s excluded

You don’t want to be taken by surprise if you need to file a claim , only to find out that there’s a gap in your coverage. Reviewing the details of a business insurance policy with the help of an agent or broker can help you pinpoint any potential holes in your plan that could leave your business vulnerable.

3. Compare Quotes for Business Insurance

Many companies offer business insurance, and all of them price their policies differently. The main pricing considerations for business insurance include what you’ll pay in premiums and what you’ll shell out for a deductible , should you need to file a claim.

Providing as much information as possible about your business, including the number of employees, annual revenue, and value of business property, can help you get the most accurate insurance quotes.

Getting one quote is a good start, but it’s helpful to have other quotes to compare it with. At a minimum, it may be a good idea to get at least three quotes for business insurance so you have a better idea of the price range you’re working with.

If you’re buying multiple policies to cover different things, get quotes for each. You may want to take quotes for individual policies and compare them with pricing for bundled business insurance to see if bundling might save you any money.

When do I need business insurance?

Generally, you need to have business insurance if you’re concerned about the possibility of financial losses stemming from liability claims or other events. If you don’t have the proper insurance in place, you could take a sizable financial hit if you’re sued for damages. Business insurance may also be necessary if it’s mandated by law in the state where you operate.

Should I buy stand-alone policies or a bundled business insurance package?

If you only need one or two types of business insurance, then it could make sense to choose stand-alone policies. On the other hand, if you’re looking for more comprehensive coverage, then you may benefit more from purchasing a business insurance package or bundle. Buying bundled insurance potentially could be more cost-effective if you’re able to get multiple policies at discounted rates.

What types of business insurance would I need if I work from home?

Working from home doesn’t negate the need to have business insurance. At a minimum, it may be advisable to have general liability insurance in place. You also may want to purchase insurance to cover any business property that you use while working from home if it’s essential to your business operations.

Business insurance can be invaluable if you find yourself in a worst-case scenario and need to file a claim. Taking time to compare the different types of business insurance can help you determine which policy or policies are best suited to your needs. Once you know what coverage you need, you can take the next step and compare quotes from the best small business insurance companies .

Insureon. “ Product Liability Insurance .”

North Carolina Department of Insurance. “ Types of Insurance for Your Business: General Liability .”

U.S. Small Business Administration. “ Get Business Insurance: Six Common Types of Business Insurance .”

IRMI (International Risk Management Institute). “ Business Income Coverage (BIC) .”

North Carolina Department of Insurance. “ Workers Compensation .”

IRMI (International Risk Management Institute). “ Employment Practices Liability Insurance (EPLI) .”

North Carolina Department of Insurance. “ Types of Insurance for Your Business: Automobile .”

North Carolina Department of Insurance. “ Types of Insurance for Your Business: Excess and Umbrella .”

North Carolina Department of Insurance. “ Emerging Coverages: Cyber Liability Insurance ,” select “What might a Cyber Liability Insurance Policy cover for a business?”

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