Starting your own insurance company is not beyond what you can achieve in 2022. With almost 6,000 insurance companies in the United States and more than 1.1 million people working in the sector, you can set up your own company with ease as well.
In Nigeria, less than 70 insurance companies service the coverage needs of more than 220 million people, leaving you enough opportunity to make billions yearly if you’d start your own insurance firm. Here then is the process of setting up your own insurance company in 2022:
How to Start Your Own Insurance Company
Conduct diligent preliminary research
You need to fully understand the insurance industry in your state and country before plunging into the business. The insurance sector is highly regulated by the government and other relevant agencies, so you must learn all you can about the industry before diving in.
You must understand your competitors and how they structure their business for efficiency, determine the size of your target audience, analyze the types of policies you will cover, and the latest industry trends.
Get the requisite trainings
Some states in the United States require that you undergo hours of intense trainings before you are allowed to establish your own insurance business. States like Colorado, Ohio, and Illinois among others will require training in addition to background checks and fingerprinting as part of the certification process.
It might also be important to gain insider experience by working as an insurance agent or broker with another insurance company before setting up your business. Prior work experience as an agent or broker will equip you with insider knowledge of how the industry runs and how to maximize customers’ needs.
Prepare a detailed business plan
You need a detailed business plan to guide your takeoff and operational activities. With your business plan, you will define your target audience, their coverage needs, the insurance products and services to launch, mission statement and executive summary, estimated revenue and expenses, marketing strategies, legal structure, as well as operational costs among others.
Acquire government licensing
You need government licensing and official permits to launch an insurance business. You may have to pay certain fees to obtain the required licenses from state and federal governments. You may also have to formally register your business with the required government agency, obtain the necessary tax ID, and sign up with regulatory agencies such as the National Insurance Producer Registry (NIPR) in the United States or National Insurance Commission (NAICOM) in Nigeria.
Choose an insurance business model
Your new insurance company must be distinct from existing ones in the market and must cater to a distinct class of customers for relevance. You must determine the policies and coverages you will provide and the applicable premiums and compensations for claims. You must also determine if you want to cater to the insurance needs of people with bad credit, drivers with traffic violations, high-risk individuals, and other unique classes of customers.
You can then drill down to the specific type of coverages such as health insurance, property insurance, vehicle insurance, life insurance, travel insurance, and marine and cargo insurance among others. You must also determine if you want to work with third-party brokers, marketing agents, or sell directly to potential consumers.
Market your insurance business
With an effective and sustainable marketing strategy, you will be able to win your target audience in record time. Your strategy should pursue various approaches for individuals and families as well as business entities. You may have to advertise in the local media and set up social media campaigns to reach customers directly, and you should consider listing in local business directories in your city.
With all these things in place, your new insurance business is certain to grow into a viable company in a couple of years. You need tenacity and resilience to scale your business and take it to the next level where it can efficiently compete with existing companies in the wide industry.
Photo by Mikhail Nilov from Pexels
