Insurance business. Opening an insurance company as a business
Russian insurance services are well developed. And this must be taken into account when drawing up a business plan for an insurance company, since most people are accustomed to using the services of trusted agencies with long history. And the young company comes first initial stage may face great difficulties in its development. In order to minimize many problems, it is necessary first of all to identify a special market segment - an insurance niche that is not yet occupied in the city and surrounding areas, and that also satisfies the growing consumer demand. A business plan for an insurance company from scratch is drawn up according to a standard structure.
Resume
Ideal business support is an agency full service for the insurance industry. Ideal offers wide range support services designed for insurance agents. An ideal will specialize in a few offerings, but can do almost everything. While the market for support services is competitive, most companies are generalists. The ideal will stand out by concentrating on the insurance niche.
The purpose of an insurance company business plan is to provide the best business support services to the client. We exist to attract and serve customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed our clients' expectations.
The ideal has two strong competitive advantages. The first is knowledge of the insurance industry. The owner's experience in the industry is invaluable. This experience will allow you to better serve your customers by leveraging information about customer needs and preferences. Additionally, the value of networks based on previous insurance relationships will give the company a big head start in the competition. By establishing relationships with many people in the industry, you can leverage these professional connections.
The idea is projected to reach profitability by month 11 and generate $44,000 in profit by three years.
Composing step by step business insurance company plan was received good information about the market and about the common attributes of the most valuable and loyal customers. This information will be used to better understand who is being served, their specific needs and how Ideal can better communicate with them.
The customer profile consists of the following geographical, demographic and behavioral factors:
| Market analysis | |||||||
| 2017 | 2018 | 2019 | 2020 | 2021 | |||
| Potential clients | height | ||||||
| Exclusive agents | 7% | 78 | 83 | 89 | 95 | 102 | 6,94% |
| Insurance brokers | 8% | 123 | 133 | 144 | 156 | 168 | 8,11% |
| Other | 0% | 0 | 0 | 0 | 0 | 0 | 0,00% |
| Total | 7,66% | 201 | 216 | 233 | 251 | 270 | 7,66% |
Services
An insurance company business plan example provides the market with a range of support services for insurance agents. Ideal strives to deliver the following benefits that are important to its customers.
- Industry knowledge: Agents don't have time to train service staff on all the complexities of the insurance industry. Therefore it has great value, if the support team has industrial understanding.
- Convenience: Services must be available when agents need them. In addition, it is difficult to accurately predict when such a need will arise.
- Customer service. To build sustainable business, customers must be 100% satisfied with Ideal's services. This business philosophy will be ingrained in the minds of all employees.
Market Trends
The market trend for insurance agents (as well as other service providers) is to outsource non-essential activities, allowing the business to focus on its core competencies. This allows the insurance company's business to focus more precisely on its business model.
Reasons for this trend:
- Reduced overhead costs.
- Reduced training costs for non-existent employees.
Market growth
During the last two years, the insurance support services industry was worth $498 million. From 2015 to 2017, the industry growth rate was 5.6%. Over the next three years, the industry is expected to have no problem maintaining this excellent growth.
Another growth driver has been the gradual acceptance of insurance as a smart risk management strategy. With recent unexpected events such as natural disasters and terrorism, the insurance industry is likely to continue to grow as people and companies hedge their risks with insurance.
A sample insurance company business plan that needs support can be divided into two segments:
- Exclusive agents: these are agents for only one type of insurance, for example, state farm. The insurance agent will sell all types of coverage that State Farm offers, but only State Farm insurance. While the choices here are limited, the advantage of an exclusive agent is that they usually have a very strong relationship with that company, which is good if there are any claims issues.
- Insurance brokers: these agents do not have an exclusive contract with any one insurance company. They may offer insurance from multiple companies. The benefit of this setup is that they can offer a broader range of service offerings than an agent who only sells one brand of insurance.
Marketing company
The sole purpose of the business plan is to position the insurance company as the most efficient support service that commands the majority of the market share. Marketing strategy will focus primarily on raising customer awareness of the services offered, then developing the customer base and finally working to build customer loyalty and referrals.
- The company will use a variety of sources, such as the yellow pages and a trade magazine.
- The second way to communicate is through networking based on industry relationships.
- The third way is to participate in a regional exhibition, which attracts most local agents and brokers.
- The final communication method is a direct mail campaign targeting local insurance agents and brokers. The email campaign will provide all potential customers with information about Ideal's offerings.
Marketing approach
The marketing mix of an insurance company's business plan consists of approaches to pricing, distribution, advertising and promotion, and customer service.
- Pricing: Pricing scheme will be competitive with other support service providers.
- Spreading: Services will be offered at the client's place of business or in the office, whichever the client prefers.
- Advertising and promotion: a multi-level marketing campaign will be used to ensure visibility and equity.
- Customer service: managers will be held accountable for achieving these ambitious goals.
Advantages and Disadvantages
The business plan of the insurance company also reflects the strengths and weaknesses within the firm and describes the opportunities and threats facing Ideal.
Advantages of opening an insurance company:
- In-depth industry knowledge.
- An effective, comprehensive training program for employees.
- Extensive industry network connections.
Disadvantages of opening an insurance agency:
- Limited marketing budget to ensure visibility.
- Inability to scale quickly to large increases in demand.
- The brand is missing.
Possibilities:
- Participation in a growing industry.
- Work in an industry that is required by almost all Russians.
Ability to spread overhead costs as customer base increases.
Competitive advantages
The insurance company's business plan will position itself as the most experienced insurance support service. This positioning will be achieved by leveraging its competitive advantage.
Competitiveness is a specific deep industry knowledge of insurance. Although this specific knowledge will hinder a large market, it makes a small part of the market very attractive.
This in-depth industry knowledge is based on the firm's principal experience as an independent insurance agent. The owner will collect all this intellectual capital and turn it into curriculum so that it becomes organizational knowledge.
The competition consists of many different service companies offering a wide range of services. However, none of them are intended for the insurance industry. While companies providing services in different industries offer adequate service, there is an advantage to hiring a company that services the industry and is much more knowledgeable about your specific needs.
Agent buying models simulate long-term relationships. If customers are satisfied, they tend to stay with the same service provider. Typically for new clients transition period, where both parties spend time getting to know each other and their different needs. If it can be done once sooner, then it is more cost effective than moving from provider to provider.
Registration
Before you open a company providing insurance services, you must register legal entity(LLC or CJSC). The size of the authorized capital of the new organization depends on what types of insurance the company’s activities will cover. If the company's services include life insurance for clients, then the authorized capital should be larger. To carry out insurance activities, you must obtain the appropriate certificate. We also recommend that you familiarize yourself with the relevant OKVED codes. The process of obtaining a certificate takes from 6 to 12 months.
Room
The business plan must provide a description of the premises in which the insurance company's office will be located. The premises must have a convenient location. The office building should be adjacent to a parking lot, the area of which can accommodate not only the cars of company employees, but also clients. The area of the premises is determined based on the number of insurance services provided.
The insurance company's office should be brought into proper shape. It is advisable to use the services of designers when decorating the interior. The room should be discreet business style. We must also not forget about the dress code of employees. This helps to form a positive impression of the company.
Financial plan
It is necessary to determine:
- fixed assets;
- intangible assets;
- primary costs;
- costs of paying for third party services;
- labor costs and taxes;
- total estimated costs for the year;
- profit for the year.
- You also need to create a short balance sheet.
This section will present the financial calculations of the insurance company's business plan as they relate to marketing activities. An insurance company's expenses and revenues focus on break-even analysis, sales forecasts, expenses, and how they relate to marketing strategy.
Break-even analysis
An insurance agency's break-even analysis shows that it would require $15,609 in monthly revenue to reach the break-even point.
Sales forecast
First month will be used to create an office. This includes choosing a site, purchasing furniture, and setting up a computer network.
First week of second month will be used for intensive training of two support staff. The last three weeks of the month will see sales activity. From now on, sales will increase steadily.
Fifth month– the last two support staff will be hired. They will also be trained during the first week of the month and then loaded.
| Sales forecast | |||
| 2017 | 2018 | 2019 | |
| Sales | |||
| Exclusive agents | $ 51049 | $ 112548 | $ 121458 |
| Insurance brokers | $ 59812 | $ 125745 | $ 134745 |
| Total sale | $ 110861 | $ 238293 | $ 256203 |
| Direct sales cost | 2003 | 2004 | 2005 |
| Exclusive agents | $ 7657 | $ 16882 | $ 18219 |
| Insurance brokers | $ 8972 | $ 18862 | $ 20212 |
| Interim direct cost of sales | $ 16629 | $ 35744 | $ 38430 |
Cost forecast
Marketing expenses should be budgeted to be high during the first quarter; a function of the desire to create visibility for a start-up company. After the first quarter, expenses will fluctuate depending on what marketing activities occur during each month.
| Marketing budget | |||
| 2017 | 2018 | 2019 | |
| Advertisements | $ 2920 | $ 4000 | $ 5000 |
| Trade shows | $ 2 700 | $ 3000 | $ 3500 |
| Other | $ 2 025 | $ 2250 | $ 2500 |
| ---- | ---- | ---- | |
| General sales and marketing expenses | $ 7645 | $ 9250 | $ 11 000 |
| Sales percentage | 6,90% | 3,88% | 4,29% |
Risks
- Somewhat risky due to the regulatory nature of the insurance industry.
- Future competition from franchise support.
As computer technology continues to become more and more efficient and useful, it may reduce the need for support staff services.
The insurance business can confidently be classified as complex. It requires serious financial investments and good knowledge in the insurance industry, and the ever-growing competition does not allow you to relax. But, taking into account the fact that the demand for insurance services is only increasing, engaging in the insurance business is promising and profitable.
Today we’ll talk about what insurance services exist, how to open your own insurance company and in what form this can be done.
Insurance company business plan
When opening an insurance company or insurance agency, it is important to have a quality business plan.
We invite you to familiarize yourself with a sample business plan for an insurance company, taken from your thesis.
How to open an insurance company
Company registration
There is also such an organizational and legal form as a mutual insurance company. Mutual insurance organizations, registered in this form are non-profit, so the role of profit in them is a rather controversial and ambiguous issue.
There are plenty of types of insurance services, and when filling out an application regarding OKVED codes, just in case, it is better to indicate all items containing the word “insurance”. In addition to insuring something, you can also conduct various examinations and assessments. Such activities, naturally, should also be related to insurance.
Information for Russian entrepreneurs. At the initial stage, you can even indicate those types of activities that you do not intend to engage in immediately when opening a company. So to speak, for the future. However, the exception is life insurance - this type of activity should be decided upon immediately. If you plan to insure life, then the authorized capital of the company when opening it must be at least 20 million rubles (~305 thousand dollars).
Obtaining a license
The process of obtaining a license for insurance activities is quite long - it can last from six months to a year, or even more. To apply for a license you must have the following documents: complete package constituent documents; business plan of the organization; the insurance principles you have developed that will guide you in your work; tariffs for the provision of insurance services and their calculations.
Not only the documents provided, but also the qualifications will be subject to careful verification general director organizations. If all documents are approved, you will be granted a license, and the created organization will be entered into the unified register of insurance companies.
Types of insurance services
All types of insurance are established by law in each country. In fact, you can insure anything as long as it falls under one of existing species insurance. The business relationship between the client and the insurance organization will also be determined by the type of insurance (conditions, rates, risks, etc.). The most common types of insurance services:
1. Personal insurance:
- health insurance;
- insurance against illnesses and accidents;
- life insurance;
- children's insurance;
- disability insurance;
- insurance for those traveling abroad;
- pension insurance.
2. Property insurance:
- business insurance;
- business interruption insurance;
- home insurance;
- cargo insurance;
- insurance vehicles(air, ground, water);
- property insurance against fire, storm, flood and other disasters;
- insurance of other types of property.
3. Liability insurance:
- professional liability insurance;
- cargo carrier liability insurance;
- corporate liability insurance;
- employer's liability insurance;
- liability insurance of vehicle owners;
- insurance of other types of liability.
4. Economic risk insurance:
- commercial risk insurance;
- legal risk insurance;
- political risk insurance;
- technical risk insurance;
- insurance of financial and credit risks.
Office premises
IN insurance business you are unlikely to get by with just one room. Successful insurance companies have one head office - it is located in the city center or close to it and is the largest in area. Count on about 500 square meters. Other offices may be much smaller. They are intended only to receive clients and negotiate with them.
If you are going to work in big city, then ideally they should open at least one office in each district. When choosing premises, pay attention not only to their technical condition, but also to their location - the offices of the insurance company should not be somewhere in dark alleys. If the company plans to engage in examinations and conduct expert assessments, then a separate office should also be allocated for this activity.
To create the image and recognition of the company, it is better to adhere to the developed corporate style in interior design and employee uniforms in all offices.
Staff
Experienced and professional management is, of course, very important for the company. But the main driving force in this business is insurance agents. They are the ones who bring clients to your company, and therefore bring profit. You can also hire novice agents (if they have the necessary skills and show promise of becoming professionals), but at the very beginning of your activity it is very important to get at least a few experienced agents. This is not so easy to do, because good insurance agents have always been and will be worth their weight in gold. You can only lure them away from other companies by offering more favorable working conditions.
Unlike office employees, insurance agents must be able to work outdoors, in " field conditions" For example, agents working with auto insurance should always be in places related to cars - car markets, car dealerships, etc. Your insurance agents should have clear instructions on what, to whom and how they should offer. And the goal of their work should be not only to offer services, but to turn potential insurance clients into real ones.
In order for insurance agents to have an incentive to work and develop their skills, you must provide them with decent wages. Usually this is a certain minimum that the agent will receive for any number of transactions concluded + a considerable percentage of sales.
Opening a branch of an insurance company
Along with opening your own insurance company from scratch, it is quite common and profitable to open a branch of an existing insurance company. Both foreign and domestic insurance organizations can act as such companies.
If you want to open a branch of an insurance company, then your cooperation with it will resemble the relationship between the franchisor and the franchisee. You begin negotiations with the foreign or domestic insurance company you are interested in, and if all the conditions for future cooperation are satisfactory to both parties, then the insurance company provides you with everything you need to conduct business as a branch. In addition, the insurance company provides a lot of assistance both in preparing registration documents, and in the process of direct insurance activities. If you are more attracted to being under the auspices of an existing experienced insurance organization and are afraid of risks, then this option of starting a business is just for you.
It is also worth noting that not just any insurance company can become a branch. Quite strict conditions and restrictions are put forward, first of all, for foreign organizations. Some of them:
- a branch of a foreign company in Russia must comply in its activities with the rules of the current Russian legislation, even if they differ from the rules of the legislation of the “home” country of the foreign company;
- in the event of disputes or claims between clients and the Russian branch of a foreign insurance company, the case will be considered by the court Russian Federation, and not the court of the country in which the parent company is located;
- It is possible to open a branch of a foreign insurance company in Russia only if the company has worked in the insurance market different types at least five years, in the life insurance market - at least eight years.
6.1. Organization of insurance and characteristics of insurance flows
6.2. Areas, forms and types of insurance. Insurance market
6.1. Organization of insurance and characteristics of insurance flows
The entrepreneurial sphere and human life are constantly associated with risks - natural, entrepreneurial, financial, etc. As a result of a natural disaster or certain unforeseen event, individuals and businesses may suffer damage. At the same time, the question arises about the source of its compensation. There are two possible options. The first is that this damage was covered by the financial resources that are in circulation with this entity. However, this means their diversion from their main purpose - ensuring life and production. The consequences of such diversion depend on the amount of damage and can manifest themselves either in a reduction in the increase in production and the scale of life, or in their reduction, or even cessation. Those. this option is very risky. The second option is to create special targeted resources intended to compensate for losses - reserve insurance funds.
The creation of reserve insurance funds, in turn, can be carried out in three forms:
self-insurance funds;
centralized insurance coverage;
collective insurance funds.
Self-insurance based on individual responsibility and lies in the fact that every legal and individual forms its own insurance (reserve) funds at the expense of its own resources and income. This is an expensive and irrational form.
Centralized insurance coverage based on state liability and provides for compensation of losses at the expense of national funds. At the same time, part of these funds is allocated to separate funds, for example, the reserve fund of the Cabinet of Ministers. At the same time, the insurance liability of the state is limited to emergency events, because public finances are intended to ensure the functions of the state, to which insurance does not belong. Insurance coverage for the current activities of legal entities and individuals is their prerogative and cannot be completely transferred to the state. Creation collective insurance funds, those. insurance is based on solidary responsibility of the participants of these funds. The essence of insurance relations is that the formation of insurance funds is carried out through contributions from all participants, and compensation for losses from these funds is carried out for those who experienced them as a result of certain events and circumstances.
Insurance is the most expedient, economical, effective and rational form of creating insurance funds.
Insurance - this is a system of exchange and redistribution relations regarding the formation and use collective insurance funds based on joint liability.
From the perspective of the targeted formation and use of insurancefunds- these are redistributive relations between thosesubjects who paid insurance premiums and those who receive compensation for losses. From a relationship perspectiveindividual entities with insurance companies-this is the price to pay for avoidancerisk (payment for peace), i.e. exchange relations. The placement of insurance funds on the financial market reflects relations regarding the trade of temporarily free financial resources, i.e. redistribution of resources between insurance participants and other subjects of financial relations.
The organization of the insurance business is based on the identification of insurance subjects and forms of insurance relations.
Main subjects insurance is the insurer, the policyholder and the insured person.
Insurer- legal entity - an insurance company that operates on the basis of an appropriate license, undertaking obligations to create a collective insurance fund and pay insurance compensation from it. According to the method of financial activity, the insurer is an ordinary business structure that operates on the basis of commercial calculation. In terms of its subject of activity (financial resources), the insurer is a financial institution.
Policyholder- a legal or natural person who, on the basis of an appropriate agreement with the insurer, pays insurance premiums to the insurance fund.
Insured person- a legal entity or individual who owns the insurance compensation upon the occurrence of an insured event. In addition, a subject may be identified as a recipient of insurance compensation in cases where the insured person cannot receive it.
Relationship Insurances are quite varied. As a rule, they are two- or three-sided. Bilateral relations develop between the insurer and the policyholder, who is also the insured. A tripartite relationship arises between the insurer, the policyholder and the insured.
In some cases, several insurers may participate in insurance relations. This is based on two forms of insurance relationships: coinsurance and reinsurance. Coinsurance - this is participation in the insurance of several insurers at once. Reinsurance is the transfer of an insurance contract from one insurer to another.
Insurance payments - this is a one-time or gradual transfer of funds by the policyholder to the insurer. They are the source of formation of both the collective insurance fund and the income of insurance companies. Insurance payments are made on the basis insurance rates- the amount of payment per unit of sum insured. The insurance rate consists of two parts - the net rate and the load. The net rate reflects that part of the tariff that is intended for payment of insurance compensation. It depends on the total amount of insurance compensation (determined on the basis of statistical studies on the number of insurance events and the average cost of compensation per event) and the number of policyholders covered by this type of insurance. The load reflects the insurer's expenses associated with insurance and its profit.
The insurance rate is the price of insurance. This is the main factor of competition in the insurance market. The more policyholders are covered, the lower the insurer's expenses, the lower the insurance rate and the greater the opportunity to attract new clients.
Insurance compensation- is the payment by the insurer to the insured (or recipient) of the full or partial amount of damage. The amount of insurance compensation depends on two factors - the insured amount and the insured loss. Sum insured characterizes the scale of this insurance operation, i.e. for what amount is this or that object insured? This amount is determined, on the one hand, by the valuation of the insurance object, and on the other, by the capabilities and wishes of the insured. The ratio of the insured amount to the valuation of the insurance object characterizes insurancesecurity, which cannot exceed 100%. Insurance loss represents a cost estimate of losses caused to the insured.
There are different systems for determining the amount of insurance compensation. The main methods are full and proportional liability. If the insurer is fully liable, insurance compensation is paid in the amount of damage caused, but not more than the insured amount. With a proportional system, liability is distributed between the insurer and the insured in a proportion that reflects the relationship between the sum insured and the value of the insurance object. For example, if the insured amount is half the value of the insurance object, then the insured will be paid insurance compensation in the amount of 50% of the amount of damage caused.
Reinsurance, as a rule, is not accompanied by cash flows associated with the movement of insurance fund funds between two insurers. In the relationship between the insurer and the reinsurer, there are cash flows that characterize the financial relations between them regarding the purchase and sale of insurance contracts. As a rule, they are carried out in the form of a commission. These relationships do not relate to insurance cash flows, since they do not characterize the movement of funds from insurance funds.
Relations with the financial market characterize the placement of temporarily free funds of insurance funds on it and the receipt of income from it. These incomes are divided into two parts. One of them generates the income of insurance companies and represents a certain part of their profit. The second part goes directly to the formation of insurance funds. It characterizes the reduction in the cost of insurance for policyholders through the use of their funds (insurance payments) in the financial market. This is an important component of the rational and efficient use of the country’s financial resources as a whole.
Insurance relations between insurance subjects and cash flows are governed by relevant agreements between the insurer and the policyholder, which have legal force. The document that certifies the fact of insurance is called insurance policy (certificate). It is issued by the insurer after payment of the insurance premium (one-time or first). The insurance policy specifies the object and type of insurance, the duration of the contract and insurance cases. There are terms of “insured event” and “insured event”. Insurancehappening- This possible event, the occurrence of which may cause damage. It characterizes a certain risk against which insurance is provided. Insurance event represents an event that actually occurred. It must be officially registered. Those. an insured event is a possible event, and an insured event is something that happened.
In this material:
Insurance – profitable business. The competition in this market is serious, but by investing once and organizing everything correctly, you can get a solid monthly profit. Find out how to open an insurance company, what you need to start a business, and how to get maximum profit with minimal investment.
Insurance business for a beginner: the basics
Let's figure out how relevant the insurance business is, what pros and cons it has, and what risk factors can overtake you when opening such a company.
Relevance
You can often hear: “No one is immune from...”. And this applies to absolutely everything. People insure everything - from real estate to own life. A master will insure your eyesight, a singer will insure your voice, a perfumer will insure your sense of smell, etc. Today even pets are insured.
Insurance is so popular that people even insure their health against certain diseases(for example, from tuberculosis). Moreover, there is both voluntary and compulsory insurance.
The decision to open an insurance company will always be the right one, since such a service was, is and will be relevant in the market.
Pros and cons of the insurance business
Positive aspects of opening an insurance company or agency:
- High business profitability;
- Increasing need for insurance among various segments of the population;
- The ability to “customize” your services as flexibly as possible for a specific region of the country;
- You can open a franchise company and offer services on behalf of a reputable company.
Flaws:
- Difficulties with registration large number documents at the stage of opening a company;
- A large amount for the formation of authorized capital - from 20 million rubles;
- The need to constantly monitor the market and competitors so that the company always stays afloat;
- The risk of various unforeseen situations, because of frequent access people for insurance payments.
Remember! The insurance business is a profitable, but very risky business. Therefore, you need to initially weigh all the pros and cons, and only after that start organizing your business.
Risks
The risks of an insurance company's business plan are divided into categories.
current data is provided after ordering the power supply Market
Problems can arise at any stage of the formation/operation of an enterprise:
- Decreased demand for certain services due to reductions in insurance payments;
- Unfair competition from other companies;
- Rising prices for equipment and materials that are extremely important for the normal functioning of the company;
- Increasing the number of branches of competing firms;
- Increased fee for public utilities, rental premises, etc.
Financial
Such risks include delays in payment for goods by counterparties, choosing the “wrong” investor, problems with paying loans, collateral, etc.
Internal risks
The main problems may lie directly within the company's employees themselves. It is imperative to assess these risks, because the slightest conflicts and misunderstandings between employees can lead to serious problems:
- Strikes. Because of them, work can simply stop indefinitely. Common reason– delay in salary;
- Disclosure of trade secrets. All important data will be transferred to competitors;
- Court proceedings, fines, inspections. May arise due to the selection of unprofessional employees.
The most profitable types of insurance
One of the innovations is insurance of large sums of money, lying in bank accounts. This money covers very substantial deposits, and the cost of such insurance is quite high.
Property insurance will always be popular. Moreover, both ordinary apartment owners and owners of country villas apply - the price of such property can be several million dollars.
Third advantageous view insurance – car insurance. This includes both compulsory insurance of the MTPL type and other voluntary types, which allow you not to worry about the theft of your car or its damage by ill-wishers.
Organization plan
To open an insurance company, you need to go through several mandatory stages, and take each one as seriously as possible. These include:
- Registration of an enterprise;
- Rent of suitable office space;
- Selection of equipment and furniture;
- Recruitment.
Enterprise registration
IN mandatory you need to register a legal entity. The company can have any form of ownership: LLC (limited liability company), CJSC or OJSC (closed or open joint-stock company).
From the types of activities you need to choose one that contains the word “insurance”. But if it is planned to carry out examinations as part of the work, then they must also have a direct connection with insurance.
Important! More on preparatory stage you need to decide whether the company will provide life insurance. This is important because, subject to the provision of such a service, the authorized capital must be at least 20 million rubles.
After registering a company, you need to obtain a license allowing you to provide insurance services. To do this, you need to submit to the Ministry of Finance:
- Constituent documentation of the company;
- Business plan;
- Rules for the provision of insurance services;
- Tariff calculations.
The director of the enterprise will need to confirm his qualifications, work experience, and legal education. It takes about a year to obtain a license, and you will need to pay a state fee for this process. If everything goes “smoothly”, the company will be included in state register insurance companies, and you can start working immediately.
Office space
The office must have a representative appearance that inspires confidence - no one will take their money to a company whose office is located in an old garage. Every client wants to come to a company with a respectable image and good reputation.
The area of the premises must be chosen so as to accommodate not only the working staff, but also to make visiting clients feel comfortable. If the company is its own, then it must have a head office (at least 600 sq. m.) and city branches (200-300 sq. m. each).
The premises must be renovated, clean air, and an atmosphere that inspires confidence. The design of the offices should be the same and consistent corporate style which creates a good impression.
Furniture and equipment
Should form in visitors positive opinion. It’s worth buying new, modern furniture top quality. For each workplace you need to purchase equipment:
- Modern computer;
- Printer;
- Telephone;
- Fax;
- Scanner.
It is necessary to provide each employee with reliable access to the Internet, a dedicated telephone line. Must be in the office household appliances: kettle, refrigerator, microwave, etc.
Employees
You need to hire professionals who can not only serve visitors, but quickly solve pressing problems. Neglect interviews, studying resumes, etc. not worth it.
If examinations are carried out, then you can not recruit experts into your staff, but hire a specialist “from the outside”, concluding an official deal with him. But, it is important to carefully study the company you plan to contact and check all its documentation.
Advertising campaign: attracting the maximum number of customers
You need to promote your company based on the package of services provided. For example, if health insurance is advertised, then it is worth contacting the companies of large companies directly. market enterprises who want to improve working conditions for their employees.
The most popular channels for attracting customers are banks and car dealerships. The downside is that most insurance companies use them. Initially, you will have to reduce prices for services in order to win your first customers.
The third channel for attracting clients is expanding the range of services provided. You can use a cross-selling insurance scheme when several insurance options are offered at once.
The money side of the issue
As part of the business plan for an insurance agency or company, you need to calculate the initial and ongoing costs, and then predict the expected profit.
Initial investment and running costs
For each specific case, the initial amount will be different. It also depends on the region of Russia. But, speaking of approximate initial investments, it is worth mentioning the amount from 7,000,000 rubles.
What does it include:
- Rent of premises – 50,000 rubles. per year;
- Preparation of documentation – 700-900 thousand rubles;
- Renovation of the premises and purchase of equipment – 2 million rubles;
- Advertising campaign – 3 million rubles;
- Administrative costs – 1 million rubles.
Total: 7 million rubles.
Ongoing costs will consist of:
- Issuing wages to employees;
- Phone/Internet payments;
- Payments for utilities;
- Unforeseen expenses (for example, due to equipment breakdown);
- Printing advertising literature;
- Promoting the company on the market;
- Etc.
Profitability
In order for profits from the insurance business to constantly grow, you need to carefully monitor all changes in the market and monitor the activities of competitors. This is the only way to create an effective marketing plan and quickly make changes to the list of company services.
Important! To increase profits, it is not necessary to raise prices for services; it is much better to expand the list of services. The average profit with this approach in a city with a population of 1 million or more will be 5-10 million rubles.
Read more about the profitability of the insurance business and payback periods
If the business plan of the insurance company was prepared according to all the rules, then the profitability of the business will be about 2% per month of the invested funds. To assess profitability as accurately as possible, you need to divide monthly expenses by profit. On average, investments in an insurance company will pay off in about 4-5 years.
Even taking into account the fact that the insurance market today is occupied by many entrepreneurs, this still remains promising direction for new companies, due to the constant emergence of new insurance products.
Specific examples include insurance services for jewelry or the manufacturers of such expensive products themselves. If we are talking about a big city, then insurance for the joint construction of a property, for example, is popular. In any case, if you wish, you can special problems find your own little niche in this business. To do this, you will have to analyze the local services market and record all necessary information to an insurance agency business plan.
Registering your own business
Let us immediately note that it is best to consider the option of registering an LLC; a closed joint-stock company or an open joint-stock company are also suitable. It is best to find out the details of this or that option from government officials.
As for choosing the correct registration of OKVED, it is best to choose all the options that contain the word “insurance”, unless you have already decided specifically what you will do. Otherwise, in the future you will be able to expand your services to insure something else. In addition, insurance companies often conduct assessments and examinations, which will also need to be selected at the registry.
We note that if you plan to engage in life insurance, then pay attention to the authorized capital of the company, which should be at least 20,000,000 rubles. This issue must be approached responsibly.
Obtaining permits
Be prepared for the fact that the process of obtaining a license for this type of activity is very long. Its duration can be from six months to one and a half months. In order for your application to be accepted and the process of creating a license to begin, you will need to have the following documents with you:
- company business plan;
- a complete list of all agency founders;
- the insurance principle by which the company will operate;
- cost of services.
Let us also pay attention to the fact that not only all the documents that you provide to the authorities will be checked, but also your competence in insurance matters as a project manager. After positive result After all checks, you will receive the necessary permits, and information about you will be added to the general register of insurance companies in the country.
Selecting a room
Most likely, in such a business it will be very difficult to manage with only one room. If we consider large insurance agencies, they have a central office, which is located in the city center. As a rule, such a room will have an area of at least 400 square meters. Small branches will also be opened in various remote parts of the city, where clients are received and negotiations are conducted with them.
If we consider the opening of such a business from an ideal point of view, then in a big city you will need to open your own branch in each district. Moreover, your offices should always be placed in visible places. If you want to also provide expert assessment services for such matters, you will also need to rent a separate room.
It won’t hurt to come up with some kind of unique uniform for all your employees, as well as make the interior of the offices the same so that the company’s brand is recognizable by customers.
Recruitment
First of all, the company must have professional and experienced management. But without insurance agents there is no way to raise your own business to high level. Thanks to the actions of such people, your company will receive new customers, and, therefore, money. Of course, you will also need to hire inexperienced employees who are just taking their first steps in the insurance business, but want to learn how to do everything right and make good money. But at the initial stage, you will need to try to find professionals in their field. As you already understand, this is not very easy to do, because experienced and professional insurance agents earn a lot from their competitors and no one wants to let them go. The only option to lure them away is to provide more favorable working conditions, which will cost you a lot.
To achieve these goals, so that employees do their jobs with great desire and full dedication, you will have to provide them with excellent wages. If we consider practice, companies give their subordinates a fixed salary for any number of transactions, as well as a plus large percentage for sale.
Expenses
On average, to organize such a business you will need at least 20,000,000 rubles. The initial capital must be at least $500,000.
During the opening process, you will need to spend money on items such as:
- rental of premises;
- equipment;
- advertising campaign;
- employee salaries;
- advertising your services.
