How to start your own insurance company

A company of insurance is the company specialized in insurance, whose economic activity is to produce the security service, covering certain economic risks to economic units of production and consumption. Its activity is an operation to accumulate wealth, through the contributions of many individuals exposed to unfavorable economic events, to allocate what accumulated, to the few to whom the need arises. It follows the principle of mutuality, seeking solidarity between a group subject to risks. This mutuality is organized by business, creating a heritage that faces the risks. The unfavorable effect of these risks, considered as a whole, is substantially reduced, because, for the insurer, the individual risks are offset: only a few insured suffer them, compared to many who contribute to the payment of the coverage. This allows statistical management of risk, from an economic point of view, even if it is legally preserved individually.

A company of insurance business owners who want to create a small business that offers a steady stream of revenue in the coming years, an insurance agency is an ideal opportunity as customers buy the products to ensure that coverage continues. Among the types of insurance products an insurance company can sell are life insurance, annuities, long-term health products, automobiles, homeowners, property, causality, and disability. The opening of an insurance company requires some preparatory steps.

insurance company
image source: google image

Bellow the different types component of insurance business:

  • Become a licensed insurance agent
  • Determine which products are offered
  • Apply for a loan for business and insurance
  • Locate a suitable office
  • customer inquiries and workshops for potential customer
insurance company
image source: google image
insurance company
image source: google image

Become a licensed insurance agent

Laws and identifiers vary by state, but generally, you will require a property and insurance license and a variable health and annuity license. For example, in the state of Florida, these licenses are referred to as 440 and 220, respectively. Each can be obtained online or through an instruction in the classroom. Most community colleges also offer these courses.

Determine which products are offered

Normally, insurance agencies are not limited to specific products and have a variety of insurance plans. However, it is possible to consider that you specialize in a particular product while still offering other insurance plans. As an example, you may want to focus on corporate health benefit plans and employee benefits to sell insurance to businesses while still offering variable life products and annuities.

Apply for a loan for business and insurance

Make a list of all start-up costs, including but not limited to: office supplies, leasing, staff costs, such as wages and benefits, and insurance, such as liability and insurance for errors and omissions. Using these numbers requires an accountant or business planner to write a business plan to apply for a small business loan with the Small Business Administration database of an approved lender.

Locate a suitable office

The office space should have good exterior and interior maintenance and provide enough space for a reception area, one or two offices, and a conference room to hold initial

customer inquiries and workshops for potential customer

Buy an open your own agency. Choose between buying a franchise and opening your own independent insurance agency. The advantages of buying a franchise operate under a well-established name and you have access to “in-house” financing provided by the parent company. The advantage of opening an independent agency is the freedom to choose any product.


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