The insurance business can be confidently classified as complex. It requires serious financial investments and a good knowledge of the insurance industry, and the constantly growing competition does not allow you to relax. But, taking into account the fact that the demand for insurance services is only increasing, it is promising and profitable to engage in the insurance business.
Today we’ll talk about what insurance services exist, how to open your own insurance company and in what form it can be done.
Insurance company business plan
When starting an insurance company or insurance agency, it is important to have a quality business plan.
We invite you to familiarize yourself with a sample of an insurance company business plan taken from a thesis. Download the business plan of the insurance company
How to open an insurance company
The insurance business can function only as a legal entity, therefore, it must be formalized in the form of LLC, OJSC or CJSC. You can learn a little more about these forms of enterprises from our previous articles: Differences between OJSC and CJSC, Opening of LLC.
There is also such an organizational and legal form as a mutual insurance society. Mutual insurance organizations registered in this form are non-profit, so the role of profit in them is a rather controversial and controversial issue.
There are plenty of types of insurance services, and when making an application for OKVED codes, just in case, it is better to indicate all items containing the word “insurance”. In addition to insuring something, you can also engage in various examinations and assessments. Such activities, of course, should also be related to insurance.
Information for Russian entrepreneurs. At the initial stage, you can even indicate those types of activities that you are not going to engage in immediately upon opening the company. So to speak, for the future. However, the exception is life insurance – this type of activity should be decided immediately. If you plan to insure life, then the authorized capital of the enterprise upon 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: a full package of constituent documents; business plan of the organization; insurance principles developed by you, by which you will be guided in your work; rates for the provision of insurance services and their calculations.
Not only the documents provided, but also the qualifications of the general director of the organization will be subject to a thorough check. 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 enshrined in law in each country. In fact, you can insure anything you want if it falls under one of the existing types of 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 and accident insurance;
insurance for children;
insurance for those traveling abroad;
2. Property insurance:
business interruption insurance;
insurance of vehicles (air, land, water);
property insurance against fire, storm, flood and other disasters;
insurance of other types of property.
3. Liability insurance:
professional liability insurance;
carrier liability insurance;
corporate liability insurance;
employer’s liability insurance;
liability insurance of vehicle owners;
insurance of other types of liability.
4. Insurance of economic risks:
insurance of commercial risks;
insurance of legal risks;
political risk insurance;
insurance of technical risks;
insurance of financial and credit risks.
Premises for offices
In the 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 terms of area. Expect about 500 square meters. The rest of the offices can be much smaller. They are intended only for receiving customers and negotiating with them.
If you are going to work in a big city, then ideally you should open at least one office in each area. 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.