The idea of organizing an insurance business requires a careful approach if you want to earn real income. First of all, keep in mind that the business plan of the insurance company should proceed from the fact that you need to conduct a complete analysis of the market for existing insurance services in advance.
Important points of organizing an insurance company:
- - the authorized capital of the establishment of a legal entity must be at least 120 million rubles;
- - only a citizen of the Russian Federation who meets certain requirements can manage the company;
- - insurance activity is allowed only after obtaining a license, in order to obtain permits for the type of activity, insurance rules developed for a particular company will be required;
- - in order to obtain a permit to carry out activities, it is necessary to have central office companies.
Decide what type of insurance you will be engaged in, the amount of authorized capital will depend on this. Life insurance will require a capital of 240 million rubles, and for reinsurance at least 480 million rubles.
The main organizational stages.
Russian market already crowded with insurance companies. A detailed study of the market will make it possible to find a less filled niche. It would be wiser to choose one of the types of insurance, or services that are only gaining popularity among consumers.
As an idea, you can use, for example, a lightning strike during a thunderstorm or a meteorite fall.
When you have chosen the type of insurance that you will deal with, you should decide on the scale of your company: city, region, whole country. This will depend on the formation of the staffing table.
There is another way to define the scope of activity. Choose a specialization, for example, in water transport.
To do without attracting third-party investments, you will not be able to implement your business plan. It is for this reason that such a document should be as detailed and understandable as possible for future co-founders.
Tune in to the fact that registration of a legal entity is a rather lengthy process. You will also need a license from the Ministry of Finance, which can take four to twelve months to obtain.
The most important.
In the insurance business, an important factor is the stable and reasonable motivation of the organizers and their associates to achieve a specific level of sales.
Probably, more important than the authorized captal will be well-chosen personnel, capable of self-motivation and seeing a real perspective before failure. Even in the early stages, pay attention to the psychological aspect.
Your investors should be pre-configured for a long-term placement of their capital and not a quick payback.
For reference.
The number of insurance agencies in Russia has decreased by twenty percent. As of the end of January this year, in a single state. The register of subjects of insurance activity includes 459 insurance agencies, 14 of which are reinsurance agencies.
Own insurance company, frankly speaking, is not the most quickly paid back type of business. However, despite decent competition, there is a certain chance that in small towns a private insurance company can bring a considerable income to its owner. But only in the long run. It is absolutely not recommended to engage in this business for beginners and inexperienced entrepreneurs. The business plan of the insurance company presented below with calculations reflects the realities of the organization in as much detail as possible this business in a provincial town.
Direct investments that an entrepreneur will have to make in opening an insurance company will not exceed 2.7 million rubles. However Russian legislation clearly regulates the size of the authorized capital of an insurance company, without which its registration is impossible. It is a decent amount - 20 million rubles. Therefore, it is assumed that this enterprise there will be several founders with approximately equal shares of investments.
Summary
An insurance company, an example of opening of which is given in this business plan, must be registered as a company with limited liability under the control of one or more founders. When choosing a taxation system, you should opt for UTII - "imputation". The tax rate in this system is 15%. In some regions, it is planned to introduce a reduced rate, up to 7.5%, but so far this has not been implemented in any subject. When registering an insurance company, you need to select the following OKVED codes:
- 65.11 Life insurance.
- 65.12 Insurance other than life insurance.
- 65.12.1 "Medical insurance".
- 65.12.2 "Property insurance".
- 65.12.3 "Insurance of civil liability".
- 65.12.4 "Insurance against accidents and illnesses".
- 65.12.5 "Risk insurance".
- 65.12.6 "Insurance for a traveler traveling outside of permanent residence."
- 65.20 "Reinsurance".
It is necessary to place the office of an insurance company in a room with an area of about 150 square meters. m, which is rented closer to the city center. All fire safety rules, as well as SanPiN norms, must be impeccably observed in it. The lease agreement is concluded at a time for three years, with full payment for the first six months. It would not be superfluous to conclude contracts in advance for cosmetic repairs of the premises and Maintenance computer technology.
The work of the insurance company consists of two main areas:
- Provision of personal insurance services, including life and health insurance, as well as liability activities of intermediaries.
- Services related to property insurance and material assets, including real estate, cars and other vehicles, as well as financial risks.
The owner of an insurance company is free to choose which development path to choose, but it is still better to start with a small range of services, supplementing it as far as possible.
How much to invest in opening
The initial costs of organizing an insurance company are as follows (the amount of authorized capital is not included):
Calculations show that 37% of the initial capital will be spent on paying for the rent of the premises and carrying out office repairs. And this is absolutely justified, since the image of the insurance company plays a huge role in its future success in the market. Equipment for the office should be purchased high-quality from time-tested manufacturers.
Marketing plan
A competent marketing and promotion system aimed at expanding the client base is the key to a successful start of an insurance company and its subsequent active development. Exemplary marketing plan should be bold, even a little daring, and include the following aspects:
- scale advertising campaign in all kinds of media - newspapers, thematic magazines, radio stations and local television.
- Creation of an insurance company website with a built-in online consulting function.
- Promotion in all known Internet search engines for medium and low-frequency queries, as well as the purchase of contextual advertising packages.
The above marketing activities will ensure the attraction of a large number of customers already at the stage of formation of an insurance company.
The insurance company will "live" on the insurance premiums of its customers. For a small town, it is quite realistic to gain a customer base of 5,000 thousand people in the first six months. Average cost per month insurance premium from each client will be approximately 2000 rubles. Accordingly, the annual revenue of the insurance company will be about 10 million rubles. Part of this money will go to remuneration to agents, but these expenses are offset by profits from the provision of related services.
Production plan
The office of the insurance company should be spacious and decorated with a claim to discreet luxury. The useful area of the premises is 150 "squares", it is advisable to divide it into the following "branches":
- 20 sq. m provide under cabinet CEO firms.
- 15 sq. m to give the accountant and lawyers.
- On 50 "squares" to place the working areas of office managers.
- 10 sq. m to allocate to the PR-manager, the head of the sales department and the personnel manager.
The premises of the insurance company's office must have a fire alarm and an emergency fire extinguishing system, and, in front of everyone, it is necessary to post an evacuation plan in case of a force majeure situation.
The work schedule of insurance agents, as a rule, is not standardized. Other employees of the insurance company work in accordance with the provisions Labor Code RF. The most successful work schedule of the office of an insurance company looks like this:
- Monday - Friday from 08:30 to 17:30.
- Saturday from 09:00 to 13:00.
- Sunday is a day off.
The list of employees of the insurance company is presented below:
| № | Job title | Number of people | Salary, rub. | Monthly payment fund, rub. | Payment per year, rub. |
| 1 | CEO | 1 | 70 000 | 70 000 | 840 000 |
| 2 | Head of Sales Department | 1 | 50 000 | 50 000 | 600 000 |
| 3 | HR manager | 1 | 40 000 | 40 000 | 480 000 |
| 4 | PR manager | 1 | 40 000 | 40 000 | 480 000 |
| 5 | Office Manager | 3 | 20 000 | 60 000 | 720 000 |
| 6 | Lawyer | 2 | 30 000 | 60 000 | 720 000 |
| 7 | Accountant | 1 | 30 000 | 30 000 | 360 000 |
| 8 | Secretary | 2 | 25 000 | 50 000 | 600 000 |
| 9 | Insurance agent | 5 | 8 000 | 40 000 | 480 000 |
| TOTAL | 440 000 | 5 280 000 | |||
Calculations of income and expenses
This section of the business plan of an insurance company is devoted to the calculation of material costs and potential profits from the work of this organization in a provincial city.
The main expenses of the insurance company are as follows:
Income of the insurance company small town calculated in this table:
Calculations show that the net profit of the insurance company after making all tax payments should be about 1 million rubles. Monthly same net profit will be in the region of 80-100 thousand rubles, and this is a fairly decent amount, given the specifics of doing this business in small town. Accordingly, the profitability of the insurance company will be about 31%, and the payback period for this business project will be from two and a half to three years.
Possible risks
In itself, opening an insurance company in a small town is a rather risky undertaking - what can we say about maintaining its "operability". There are several fundamental risk factors that can seriously disrupt the full functioning of the insurance company:
- Competitive pressure to churn customers.
- The risk of bankruptcy due to a sharp increase in insured events and, as a result, payments on them.
- Amendments to the legislation related to the activities of insurance companies.
- Decrease in the level of well-being of the population, refusal of clients from insurance.
If an entrepreneur decides to open his own insurance company, then, most likely, its development will follow one of the opposite paths, corresponding to the expression “make or break”. Either success or complete failure. Unfortunately, the third option is very rare.
To independently open an insurance company from scratch, significant financial investments will be required, the payback of which will take at least four years. For successful work in this area, the company should include in its range the maximum range of services that are directly or indirectly related to the main activity. This includes protection against risks for people and property, and expert work on the assessment of insured events.
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Services
The range of services provided by the insurance agency, focused on legal entities:
| Object of insurance | Description |
| Property | This service allows you to reduce the risk of unforeseen expenses/losses in case of damage/destruction/theft of the insured property |
| Carrier liability | Entrepreneurs whose business is related to the transportation of various goods can protect their commercial vehicles and/or the object of transportation |
| Responsibility of construction organizations | In December 2012 was adopted the federal law 294 obliging developers to insure their civil liability to equity holders. In this way construction companies protect their obligations to transfer the residential premises to a participant in shared construction within the period specified in the contract. Also, enterprises protect themselves from the possibility of technical risks. This type insurance is a guarantee of the financial security of a company conducting construction and installation work. This protects the developer from numerous risks for objects under construction, property and special equipment on the construction site. |
| Financial risks | A businessman can protect his business from dangers such as:
|
| Staff | This insurance allows the employer to reduce costs in the event of occupational injuries and illnesses of employees. |
The range of basic insurance agency services targeted at individuals:
| Object of insurance | Description |
| Property | The client can insure:
Thus, the buyer of the insurance product protects his property from the following risks:
|
| Life/health | This service allows you to provide relatives and friends of the insured citizen (in the event of a serious illness or death of the latter) with certain funds |
| Automobile | It involves the sale of two types of policies:
For the agency, the second type of service is the most profitable. The owner of the car will receive compensation in the event of an insured event, for example:
|
| Mortgage | This product will help the agency's client to fulfill their debt obligations to the credit institution, for example, in case of loss of their usual income due to:
|
| Health care | Voluntary health insurance allows you to receive:
|
Relevance
Circumstances that determine the attractiveness of the insurance business:
- high profitability;
- perspective;
- significant demand for insurance services;
- variety of activities and business formats;
- government support for the industry;
- moderate competition.
Description and analysis of the market
The main trends of the Russian insurance market:
- In recent years, the following types of insurance have been in high demand: life, accident, property, and financial risks.
- At the end of 2016, total authorized capital domestic insurers amounted to 216.5 billion rubles, and a year earlier it was 189.2. There is a trend of consolidation of market participants both in terms of the size of the joint-stock fund and in terms of premiums. In 2016, the average capitalization of firms increased from 566 to 842 million rubles.
- As of December 2016, there were 251 insurance companies and 5 specialized reinsurance companies operating in Russia. At the end of 2017, their total number did not exceed 200 (including medical ones).
- Market leaders: PJSC Rosgosstrakh, JSC SOGAZ, PJSC Ingosstrakh.
- The growth trend of the concentration indicator has continued in relation to companies above the TOP 10. Strengthening of this parameter is observed for all types, with the exception of business risk insurance.
- More than 70% of market participants have a share capital of up to 479 million rubles.
- The structure of premiums of domestic companies is dominated by voluntary liability insurance (about 40%) and property insurance (about 20%).
- In 2016, the amount of insurance premiums of agencies amounted to 1,180.63 billion rubles. For the same period, the amount of payments amounted to 505.8 billion rubles.
- There is a predominance of the following sales channels for insurance products: direct sales (30%), through agents (30%), in banks (25%).
- The insurance market is concentrated in Moscow and the Moscow region.
- Today, the state of the insurance industry in Russia can be diagnosed as stable.
Photo gallery
Market structure by authorized capital in 2015 and 2016 Concentration indicator of the insurance market for the period from 2010 to 2016 Key performance indicators of the insurance market in dynamics (from 2010 to 2016) The ratio of the rates of insurance premiums and payments (by quarters for 2013-2016) Structure of types of insurance and premiums of companies (in 2014-2016) Sales channels for insurance products in 2016 and 2015
The target audience
The target audience of an insurance company can be very diverse, it depends on:
- agency specialization;
- the range of services provided;
- pricing policy;
- location of company branches, etc.
The main consumers of insurance services from among legal entities:
- industrial enterprises;
- trading companies;
- financial and credit institutions;
- agricultural enterprises;
- organizations operating in the service sector.
According to the level of income received, all consumers can be divided into:
- the poor (including pensioners, families with many children, students, people with low wages, etc.);
- middle class (for example, car owners, tourists, small entrepreneurs);
- rich (including successful big businessmen, owners of luxury real estate, Vehicle etc.).
A businessman can focus the activities of his own insurance both on all types of customers and on a certain category of consumers.
Competitive advantages
In order for an insurance company to stay afloat and function successfully for many years, it must have the following key competitive advantages:
- well-known and promoted brand;
- well-thought-out assortment, taking into account the peculiarities of the local market, the proposed location of the agency;
- availability of both compulsory and voluntary insurance programs;
- competent pricing policy;
- a sufficient number of competent agents and other employees;
- the location of the company's branches in places with high traffic of the target audience;
- prompt and courteous service;
- active work of insurance agents with potential clients;
- positive customer feedback.
Advertising campaign
- Branding. An entrepreneur must take care of creating a bright trademark and logo.
- Outdoor advertising. Placement of banners, streamers, billboards and other structures in crowded places.
- Corporate website. It should be a resource created and developed by a team of professionals. It contains information about the company, insurance products, contact details and other information.
- Promotions/presentations.
- Distribution of paper materials (including booklets, brochures, leaflets).
- Placement of advertisements in newspapers/magazines, local/central television, Internet (for example, banners, contextual advertising).
- Company service offer potential clients by phone.
- Cooperation with banking organizations, car dealerships, travel agencies and other organizations.
- to yourself;
- its advantages and disadvantages;
- services provided, etc.
Step-by-step instructions for opening
To organize your insurance company in Russia from scratch, you need:
- Analyze the market for the functioning of the future company.
- Carefully consider the package of insurance services provided.
- Create a detailed business plan with calculations.
- Determine funding sources.
- Prepare paperwork for registering the company's activities and obtaining a license.
- Register agency as entity.
- Issue a license.
- Implement company branding.
- Choose premises for the head office and branches.
- Conclude purchase and sale / lease agreements for premises.
- Carry out design, construction, repair and Finishing work in the buildings of the insurance agency.
- Select staff.
- Organize advanced training/training courses in insurance business.
- Establish alternative distribution channels for insurance services (through intermediaries).
- Conduct promotional activities.
- Grand opening of the head office and branches.
The documents
Key points of the insurance agency registration process:
| Name | Description |
| Authorized capital | The minimum values of the UK (as of 01/01/2017):
|
| Type of ownership | Options legal registration activities:
|
| OKVED codes | When registering a business, the founders indicate the following types of activities:
|
| Company name | According to the current legislation, the name of the agency must contain the word "insurance" or its derivative |
| Licensing | Each type of insurance needs a separate permit and additional contributions to the authorized capital |
To register a company, the following papers are submitted to the tax office:
- statement;
- full and abbreviated name of the organization;
- founding documents (including the articles of association and memorandum of association);
- originals and copies of the passports of the founders and the head;
- TIN and registration of the general director;
- paper evidence of the contribution of the amount of the authorized capital;
- documents on the location of the head office of the agency.
The following documents are submitted to the Insurance Market Department under the Central Bank of Russia for obtaining a license:
- a statement expressing the intention of the founders to obtain a certain type of permission to carry out the activities of the agency;
- package constituent documents;
- description of the rules, principles and tariffs for the insurance products sold;
- certificate of registration of a legal entity;
- information about the founders;
- information about the general director (autobiography, documents confirming his education, qualifications, work experience, etc.);
- detailed business plan;
- data on internal audit;
- documentary confirmation of the amount of the contributed authorized capital in the required amount;
- receipt of payment of state duty.
It will take about 3-6 months to prepare documents for obtaining an insurer's license and their consideration by the Central Bank of the Russian Federation. The validity of the permit is unlimited and does not require renewal. As a result of successful completion of the process of obtaining a license, the company will be enrolled in the Unified State Register subjects of the insurance business.
In order for the company's activity not to be suspended, the maximum liability for a particular risk should not exceed 1/10 of the agency's authorized capital.
Room and design
Criteria for choosing premises for the head office of the insurance company and its branches:
| sign | Description |
| Square | For the central office - at least 200 square meters. For branches, the optimal size is about 100 square meters. |
| Location | Suitable building:
|
| Infrastructure | Main characteristics:
|
| Communications | Availability in the building:
|
Zoning of the central office of the insurance company:
| Name of premises | Approximate area, sq. m. |
| Manager's office | 20 |
| Legal Department | 15 |
| Hall for clients | 80 |
| 20 | |
| Agent room | 35 |
| Accounting department | 10 |
| Cash register | 10 |
| Reception area | 10 |
| Waiting area for customers | 20 |
| Staff room | 10 |
| Utility room | 30 |
| Bathrooms for staff and clients | 10 |
| Total | 270 |
Features of the design and renovation of the office of the insurance agency:
- in the interior it is recommended to use light colors;
- in the decoration of walls, ceilings, floors, etc., it is better to take modern building materials;
- the room should not be overloaded with furniture;
- the office should be spacious, clean and comfortable;
- various posters and banners with information about the insurance products sold should be placed on the walls;
- furniture should have a respectable appearance;
- the central office and branches of the agency are designed in corporate colors and a single style.
Reception area and customer expectations Room for negotiations Room for negotiations Example of a customer service room The waiting area Reception area
Equipment and inventory
Equipment and inventory for equipping an insurance company, consisting of one central office and five branches:
| Name | Quantity, pcs. | Approximate price, rub./pc. | Total cost, rub. |
| A computer | 35 | 20 000 | 700 000 |
| Office equipment (including printers, telephones, faxes, MFPs, paper shredder, etc.) | — | — | 240 000 |
| Cash equipment (including cash registers, bill counters, banknote detectors, etc.) | — | — | 720 000 |
| Camera | 6 | 20 000 | 120 000 |
| Safe for storing papers | 15 | 10 000 | 150 000 |
| Safe for money | 12 | 15 000 | 180 000 |
| Furniture for the customer waiting area | — | — | 250 000 |
| Reception equipment | — | — | 1 000 000 |
| Furniture for manager's office | — | — | 250 000 |
| Staff room equipment (including furniture, refrigerator, microwave, kettle, etc.) | — | — | 500 000 |
| Meeting room furniture | — | — | 500 000 |
| Utility room equipment | — | — | 500 000 |
| Customer Service Room Furniture | — | — | 2 000 000 |
| Equipment for bathrooms | — | — | 500 000 |
| Agents room furniture | — | — | 1 300 000 |
| Security and fire alarm system | — | — | 1 000 000 |
| CCTV | — | — | 500 000 |
| Air conditioner | 12 | 40 000 | 480 000 |
| Other equipment and inventory | — | — | 500 000 |
| Total | — | — | 11 390 000 |
Checkout equipment - 120,000 rubles Equipment of the reception area - 170,000 rubles Furniture in the room for insurance agents - 200,000 rubles Office air conditioner - 40,000 rubles
Staff
Since today in Russia it is problematic to find qualified personnel for an insurance agency, they will have to be trained or “poached” from already established competitors.
The staffing of the company for the central office and five divisions:
| Job title | Quantity, pers. | Salary of one staff unit, rub./month | Payroll fund, rub./month | Payroll fund with accruals, rub./month |
| CEO | 1 | 100 000 | 100 000 | 131 000 |
| Branch manager | 5 | 60 000 | 300 000 | 393 000 |
| Secretary | 6 | 20 000 | 120 000 | 157 200 |
| Chief Accountant | 1 | 60 000 | 60 000 | 78 600 |
| Accountants | 2 | 25 000 | 50 000 | 65 500 |
| Managers responsible for certain areas of insurance | 5 | 25 000 | 125 000 | 163 750 |
| Insurance consultants/agents | 30 | 25 000 | 750 000 | 982 500 |
| Inspectors | 3 | 50 000 | 150 000 | 196 500 |
| Cashiers | 8 | 20 000 | 160 000 | 209 600 |
| Service staff | 10 | 15 000 | 150 000 | 196 500 |
| Total | 71 | — | 1 965 000 | 2 574 150 |
Requirements for the main employees of the company - insurance agents:
- higher economic/financial education;
- Experience in the insurance industry is preferred;
- sociability;
- well-delivered speech;
- active life position;
- ability to sell insurance services and negotiate;
- desire to learn;
- presentable appearance;
- Computer knowledge and ability to use office equipment.
The video material raises the question of how to become a professional in the insurance market. It tells where specialists for this field of activity study. Filmed by the channel: "PRO BUSINESS TV".
Financial plan
Subsequent financial planning The activity of an insurance agency is based on the following information:
| Index | Meaning |
| Number of founders | Three persons |
| Source of funds | Equity |
| Legal form of the agency | Public Joint Stock Company |
| License | For life insurers |
| Minimum authorized capital | 240 million rubles |
| Number of branches | Five branches and one head office |
| Location of the main office | Russia, Moscow, business center in the central part of the city |
| Location of branches | Moscow - 3 branches, St. Petersburg - 2 divisions. All representative offices are located in busy places with high traffic of potential customers. |
| Central office area | 300 square meters |
| Average area of agency branches | 100 square meters |
| Premises | Long term rental |
| Number of employees | 71 people |
| The target audience | Individuals and companies/organizations. Income level - average |
How much does it cost to open?
The cost of opening your own insurance agency consists of the following expenses:
| Expenditures | Approximate prices, rub. |
| Amount of authorized capital | 240 000 000 |
| Registration of a license | 150 000 |
| Creation of a legal entity | 60 000 |
| Obtaining approvals from supervisory authorities | 100 000 |
| Purchase of equipment and inventory | 11 390 000 |
| Acquisition software and other intangible assets | 1 500 000 |
| Rent for premises (for 4 months) | 2 800 000 |
| Branding | 500 000 |
| Design, renovation and decoration of the office and branches of the agency | 1 500 000 |
| Advertising costs (including website development) | 1 200 000 |
| Salary with accruals (for 3 months) | 7 725 000 |
| Expendable materials | 500 000 |
| Other costs | 1 000 000 |
| Total | 268 425 000 |
Recurring costs
The owner of the insurance company bears the following expenses on a monthly basis:
| Expenditures | Approximate prices, rub. |
| Insurance payments | 39 600 000 |
| Rent | 700 000 |
| Communal expenses | 130 000 |
| Salary (including deductions) | 2 575 000 |
| Advertising | 60 000 |
| Depreciation of fixed assets | 130 000 |
| Transportation costs (fuel and lubricants, car maintenance, etc.) | 50 000 |
| Security agency services | 600 000 |
| other expenses | 50 000 |
| Total | 43 895 000 |
Income
The performance parameters of the insurance company were determined on the basis of the following data:
Key figures economic efficiency business:
Calendar plan
Opening an insurance company on your own will require not only large material investments and knowledge, but also considerable time (8-12 months).
Schedule of the process of implementing the business idea of an insurance agency from scratch:
| Stages | 1-2 month | 3-4 month | 5-6 month | 7 month | 8 month |
| Analysis of the domestic insurance market | + | ||||
| Defining the direction and format of the business, the range of services | + | ||||
| Business design | + | ||||
| Preparation of documents for opening a legal entity | + | ||||
| Agency Registration | + | ||||
| Preparation of documents for obtaining a license | + | + | |||
| Checking securities by specialists of the Central Bank of the Russian Federation (for obtaining permission to carry out insurance activities) | + | + | |||
| Obtaining a license | + | ||||
| Search for premises for the central office of the company and its divisions | + | ||||
| Branding | + | ||||
| Conclusion of agreements for the lease of suitable buildings | + | ||||
| Development of design projects for the representative offices of the agency and the head office | + | + | |||
| Implementation of construction / repair / finishing works | + | ||||
| Selection, purchase, transportation and installation of company equipment | + | + | |||
| Advertising campaign | + | + | + | ||
| Search, selection, hiring and training of agency employees (including the general director and chief accountant) | + | + | |||
| Obtaining permits for the commissioning of premises from supervisory services (fire inspection, SES, etc.) | + | + | |||
| Organization of alternative sales options for the company's products (through intermediaries) | + | + | |||
| Choosing a security agency and concluding a service agreement with it | + | ||||
| Grand opening of the head office and branches of the agency | + |
Risks and payback
External and internal risks of implementing a business project to open an insurance company:
| risk factor | Description of the risk | Probability |
| Competition | The growth in the number of market participants will lead to a decrease in demand for insurance services and will entail an increase in marketing costs | High |
| Tightening requirements of state bodies to insurance agencies | The reason for the closure of many participants in this market is the growing number of requirements imposed on companies by the state. Including:
| Medium |
| Reducing the solvency of the population and legal entities | The unstable economic situation in the country can cause a reduction in the income of the population and private business. This, in turn, will lead to a decrease in demand for the services of insurers. | Medium |
| Low qualification of agents, administrative and managerial personnel and other specialists | Today, it is quite difficult to find competent and competent workers for the insurance industry in the labor market. They will either have to be lured away from competitors, or trained on their own. | High |
| Simultaneous occurrence of many insured events | This risk can lead to the ruin of the company. The company's specialists should carefully approach the issue of developing a range of services and setting tariffs for them. | Low |
The payback period for the insurance business will be 4-4.5 years.
Attention! The free business plan provided for download below is an example. The business plan that best suits the conditions of your business must be created with the help of specialists.
When opening an insurance company, you need to understand that the Russian market of insurance services is well developed. Most consumers are accustomed to trusting proven companies with a long history, and a young company can face great difficulties.
You need to start any project with planning - drawing up a business plan. At the same time, it is necessary to identify a special segment in the insurance market - an unoccupied niche, or a segment in which the supply does not satisfy the growing demand.
The business plan of the insurance company is drawn up according to the standard structure.
Summary
You must provide basic information about the company and the project:
- — organizational and legal form;
- - field of activity;
- - license;
- - room;
- - primary costs;
- - net profit;
- — profitability;
- - payback period.
In order to provide insurance services, it is necessary to register as a legal entity, clearly specifying in the charter the types of insurance services provided. The minimum authorized capital will depend on the list of services provided.
The insurance company must also obtain a license. For licensing, it is necessary to go through the certification procedure, which includes confirmation of the qualifications and reputation of the first managers, verification of constituent documents and documentation describing the types of planned insurance activities.
Description of the industry and company products
Indicate the demand for your insurance services in this region and in the selected segment of the insurance market. Focus on a wide range of services, flexible pricing policy, qualified personnel, service, individual approach.
It is also desirable to give the annual estimated growth of the company.
Marketing research
It is necessary to carry out market research and calculate potential earnings.
The business plan of an insurance company provides for the preparation of a marketing plan. He must disclose the insurance policy, products, prices, advertising costs.
In order to adequately enter the insurance services market, in the search for effective solutions, the focus should be on innovative insurance products and the development of targeted advertising strategies.
It is advisable to conduct a public opinion poll about the desire to insure in a new company, its results can give a rough idea of the level of demand for your services.
The marketing plan should justify the possibility of achieving the planned sales volumes.
Financial plan
It is necessary to determine:
- - fixed assets;
- - intangible assets;
- - primary costs;
- - the cost of paying for the services of third-party organizations;
- - labor costs and taxes;
- - total estimated costs for the year;
- - profit for the year.
You also need to draw up a summary balance sheet.
Good to know!
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organizational plan
This section of the insurance company's business plan provides the company's management structure and personnel information. Usually, two groups of employees are distinguished: office workers and insurance agents.
Risks
Lack of demand is the most dangerous risk for an insurance company. Taking into account the risks, it is necessary to calculate the break-even point of the company.
We provide you with a sample insurance company business plan free of charge to help you start your insurance business.
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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 used to using the services of trusted agencies with a long history. A young company at the initial stage of its formation may face great difficulties. In order to minimize many problems, it is necessary first of all to determine a special segment of the market - an insurance niche that is not yet occupied in the city and surrounding areas, and, moreover, satisfies the growing demand of the consumer. The business plan of an insurance company is drawn up from scratch according to the standard structure.
Summary
The ideal support is an agency full service for the insurance industry. Ideal offers a wide range of support services designed for insurance agents. The ideal will specialize in a few offerings but can do just about anything. While the support services market is competitive, most companies are generic. The ideal will stand out by concentrating on the insurance niche.
The goal of an insurance company business plan is to provide the client with the best business support services. We exist to attract and serve customers. When we stick to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
The ideal has two strengths competitive advantage. The first is knowledge of the insurance industry. Industry experience is invaluable. This experience will allow you to better serve your customers using information about the needs and preferences of customers. In addition, the value of networks based on previous insurance relationships will give the company a big step up in the competition. By establishing relationships with many people in the industry, these professional connections can be leveraged.
The idea is projected to reach profitability by 11 months and will be generating a $44,000 profit by three years.
Composing step by step business plan of the insurance company, good information was obtained about the market and about the general 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 best communicate with them.
The customer profile consists of the following geographic, demographic and behavioral factors:
| Market analysis | |||||||
| 2017 | 2018 | 2019 | 2020 | 2021 | |||
| Potential clients | growth | ||||||
| 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
The insurance company example provides the market with a range of support services for insurance agents. Ideal strives to fulfill the following benefits that are important to its customers.
- Industry knowledge: agents do not have time to train service personnel with all the complexities of the insurance industry. Therefore, it is of great importance if the service desk has an industrial understanding.
- Convenience A: 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 a 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:
- Reduction of overhead costs.
- Reduced training costs for non-existent employees.
Market Growth
In the past two years, the service support insurance industry has totaled $498 million. From 2015 to 2017, the industry's 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 adoption of insurance as a prudent risk management strategy. With recent unexpected events such as natural disasters and terrorism, the insurance industry is likely to continue to grow as individuals and companies hedge their risks with insurance.
A sample business plan for an insurance company in need of support can be broken down into two segments:
- Exclusive agents: they are agents for only one type of insurance, for example, for a state farm. The insurance agent will sell all types of coverage that the State Farm offers, but only state farm insurance. Although the choice is limited here, the advantage of an exclusive agent is that they usually have a very strong relationship with this 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 several companies. The benefit of this setup is that they can offer a wider range of service offerings than an agent who only sells one brand of insurance.
Marketing company
The sole purpose is to position the insurance company as the most efficient support service that controls 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 various sources, both the yellow pages and the trade magazine.
- The second way of communication is the creation of networks based on industry relations.
- The third way is to participate in a regional exhibition, which attracts most of the 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 offers.
Marketing Approach
Consists of approaches to pricing, distribution, advertising and promotion, and customer service.
- Pricing A: The pricing scheme will be competitive with other support providers.
- Spreading: Services will be offered at the customer's location or office, depending on which customer prefers.
- Advertising and promotion: a multi-level marketing campaign will be used to ensure visibility and fairness.
- Customer service: managers will be held accountable for achieving these ambitious goals.
Advantages and disadvantages
The insurance company's business plan also reflects the strengths and weak sides within the firm and describes the opportunities and threats facing Ideal.
Advantages of opening an insurance company:
- In-depth knowledge of the industry.
- Effective, comprehensive employee training program.
- Extensive industry network connections.
Disadvantages of opening an insurance agency:
- Limited marketing budget to ensure visibility.
- Failure to quickly scale to a large increase in demand.
- The brand is missing.
Capabilities:
- Participation in a growing industry.
- Work in the industry, which is required for almost all Russians.
Ability to distribute overheads as the customer base grows.
Competitive advantages
The business plan of the insurance company will position itself as the most experienced support service for insurance services. This positioning will be achieved by exploiting its competitive advantage.
Competitiveness is a specific deep industry knowledge of insurance. Although this specific knowledge will hinder big market, they make a small part of the market quite attractive.
This in-depth industry knowledge is based on the experience of the head of the firm, held as an independent insurance agent. The owner will collect all this intellectual capital and turn it into curriculum to become organizational knowledge.
Competition consists of many different service companies offering a wide range of services. However, none of them is intended for the insurance industry. While companies that provide services across industries offer adequate service, there is an advantage to hiring a company that caters to the industry and is much more knowledgeable about your specific needs.
Agent buying models mimic long-term relationships. If customers are happy, they tend to stay with the same service provider. There is usually a transitional period for new clients where both parties spend time getting to know each other and have different needs. If it can be done once sooner, then it is more cost effective than switching from provider to provider.
Registration
Before, it is necessary to register a legal entity (LLC or CJSC). Authorized capital new organization depends on what types of insurance the company's activities will cover. If the company's services include life insurance for customers, then the authorized capital should be larger. To carry out insurance activities, it is necessary to obtain an 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 should describe the premises where the office of the insurance company will be located. The room should 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 customers. The area of the premises is determined based on the number of insurance services provided.
The office of the insurance company should be put in proper shape. It is advisable to use the services of designers in interior design. The room should be in a discreet business style. Don't forget about the dress code of the employees. This contributes to the formation of a positive impression of the company.
Financial plan
It is necessary to determine:
- fixed assets;
- intangible assets;
- primary costs;
- costs of paying for services of third parties;
- labor costs and taxes;
- total estimated costs for the year;
- profit for the year.
- You also need to draw up a summary balance sheet.
This section will present the financial calculations of an insurance company 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
The insurance agency's break-even analysis shows that it would take $15,609 in monthly income to reach the break-even point.
Sales forecast
First month will be used to create an office. This includes choosing a site, buying furniture, and setting up a computer network.
First week of the second month will be used for intensive training of two support staff. There will be sales activity during the last three weeks of the month. From now on, sales will grow steadily.
Fifth month– The last two support staff will be recruited. They will also be trained during the first week of the month and then uploaded.
| Sales forecast | |||
| 2017 | 2018 | 2019 | |
| Sales | |||
| Exclusive Agents | $ 51049 | $ 112548 | $ 121458 |
| insurance brokers | $ 59812 | $ 125745 | $ 134745 |
| Total sale | $ 110861 | $ 238293 | $ 256203 |
| Direct sales value | 2003 | 2004 | 2005 |
| Exclusive Agents | $ 7657 | $ 16882 | $ 18219 |
| insurance brokers | $ 8972 | $ 18862 | $ 20212 |
| Intermediate direct sales value | $ 16629 | $ 35744 | $ 38430 |
Cost Forecast
Marketing spending should be budgeted to be high during the first quarter; a function of wanting to create visibility for the start-up company. After the first quarter, the costs will fluctuate depending on what marketing activities take place during each month.
| Marketing budget | |||
| 2017 | 2018 | 2019 | |
| ads | $ 2920 | $ 4000 | $ 5000 |
| trade shows | $ 2 700 | $ 3000 | $ 3500 |
| Other | $ 2 025 | $ 2250 | $ 2500 |
| ---- | ---- | ---- | |
| General sales and marketing expenses | $ 7645 | $ 9250 | $ 11 000 |
| Percentage of sales | 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, this may reduce the need for support staff services.
