Insurance Agency business plan for starting your own business
Before you think about how to start Insurance services, you must create a detailed Insurance agent business plan. It will aid you in both in setting up the business initially as well as maintaining it later on. Business plans for Insurance Agency are a good instrument to assess the success of the business and track its progress. Insurance agencies require financial expertise, for which a finance business plan is required.
Since the insurance industry is classified as a due diligence service, you may be confused about how to start independent Insurance Agency. You can refer to this template set out for a firm called Lifelong Insurance.
Lifelong Insurance will be started in the Woodlands, Texas. Our customers will be provided an insurance option for which they won’t have to suffer the headache of big city agencies. Since the market in the area is currently untapped, it offers a lot of potential, not just for Lifelong Insurance but many other businesses. This Insurance Agency business plan template can act as your reference point if you are confused about where to start.
2.1 The Business
As per this Insurance Agency business plan sample, Lifelong Insurance will be the newest and brightest independent Insurance Agency in The Woodlands (Northern Houston), Texas. Both the owners themselves have about two decades of experience working in Insurance Agencies. Lifelong Insurance is an extension of the business continuity plan.
2.2 Management of Insurance Agency
The owners, George, and Martha Bell are both CFPs (Certified Financial Planners). This is a huge honor in their domain as it shows their expertise in financial planning. As suggested by this business plan for Insurance , all the employees overlooking the operations of the agency would require a certain level of financial qualification.
2.3 Customers of Insurance Agency
Irrespective of whether you are following an Insurance Agency business plan or thinking of starting a credit repair business, you need to know who your target audience is. Lifelong Insurance has the following customer groups as its target market:
- Aspiring Young Families
- The Young & the restless
- Local Businesses
2.4 Business Target
As per this sample business plan for Insurance Agency, the business target for Lifelong Insurance is to raise the bar in the insurance industry by providing excellence and utilizing the highest principles and standards in every aspect of the business. Lifelong Insurance wants to empower its clients, employees, and community and urge them to employ these practices as well.
You may download this Insurance Agency business plan sample pdf from our official website.
3.1 Company Owner
George and Martha Bell came up with this new insurance agent business plan after combining 20 years’ experience and previously operating in a captive Insurance Agency in downtown Houston.
3.2 Why the Insurance Agency is being started
To serve a wider range of customers, the owners decided to leave their previous employment.
They decided that the best location to start their new business would be the recently developed Woodlands area as it provides a great opportunity to gain clientele. George and Martha decided on the name to signify the aim of the business to be a one stop solution for its clients and the generations to come.
George and Martha take credit for coming up with one of its kind Insurance Agency business model that prioritizes convenience.
3.3 How the Insurance Agency will be started
Even though owners have invested a significant amount of money in the business themselves, however, there are still additional costs that require investors. Therefore, the owners are on the lookout for dependable investors.
Step1: Become a licensed insurance agent
You can get an insurance agent license in a matter of weeks or months, depending on the requirements in your state. Since George and Martha are introducing this business plan of insurance company after almost two decades of experience in this sector, they already have a license.
Step2: Write your business plan
The main purpose of writing a business plan is to be prepared for many situations beforehand. So, as the name suggests, you have to plan for finances, logistics, and marketing among other things. You can get this Insurance Agency business plan template free download to get an overview of how to write a plan for your firm.
Step3: Choose a business structure
The business structure of a company determines a lot of its internal details like how it will operate and how employees will interact with each other. It will also determine your partners for running different operations. And one of the most important things a business structure determines are the tax requirements for a business.
Step4: Form relationships with insurance companies
Determining on the type of business you are starting; you will need to form different relationships. For instance, if you are starting out independently, you can contact different insurance companies to work for them. As per this insurance company business plan pdf, the owners of Lifelong Insurance are independent agents.
Step5: Expand your client base
If you are starting as an independent agent, you will have to workday and night to get the business running. This will include networking, attending different events, reaching out to different agencies and trying to land customers all in parallel. Download this free insurance business plan template to help get a head start on writing a personalized business plan.
|Research and Development||$10,000|
|TOTAL START-UP EXPENSES||$237,600|
|Other Current Assets||$251,000|
|Start-up Expenses to Fund||$237,600|
|Start-up Assets to Fund||$863,600|
|TOTAL FUNDING REQUIRED||$1,101,200|
|Non-cash Assets from Start-up||$1,150,200|
|Cash Requirements from Start-up||$155,000|
|Additional Cash Raised||$50,000|
|Cash Balance on Starting Date||$35,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$65,500|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,101,200|
|Loss at Start-up (Start-up Expenses)||$205,300|
|TOTAL CAPITAL AND LIABILITIES||$1,390,200|
Services of Insurance Agency
Different insurance agents offer different types of insurance schemes. Insurance business proposal offered by Lifelong Insurance provides a wide range of services to cater to a wide range of clients. Some of those are mentioned below:
- Life Insurance
Life insurance is a form of a contract between an insurance agency and its customers. Essentially, in exchange for your premium payments, Lifelong Insurance will be responsible for paying a certain amount to your beneficiaries as a death benefit after your demise. The use of this money will up to your beneficiaries and will not be controlled by the agency in any form. For this service, life insurance business plan is carefully drafted.
Reinsurance is a practice in the insurance domain where different agencies share their risk by investing in each other’s policies. This reduces their total loss in case they have to pay up. Such transfers are a little risky to handle and require attention from the business plan insurance broker.
- Travel Insurance
The business plan for Lifelong Insurance also provides the service of travel insurance to its customers. Like any other travel insurance, Lifelong Insurance will cover its clients for medical emergencies or evacuation, instances of trip cancellations and even in case of damage to the luggage or its loss.
- Vehicle Insurance
Additionally, this Insurance Agency sample business plan also offers vehicle insurance. Vehicle insurance covers different automobiles such as trucks, cars, and motorbikes. Its primary purpose is to be useful in case of accidents that can cause bodily harm to the vehicles.
It is recommended that you read multiple insurance business plans templates like these to decide what kind of service you want to offer.
Marketing Analysis of Insurance Agency
Had the pleasure of working with Alex on a business plan for a new venture. The end result looks very professional. His communication is always prompt and he was very patient with my detailed requests. I would definitely work with this company in the future.
It is essential that you understand the market thoroughly before you set your foot in. It will help you understand the level of competition, potential untapped market, pricing trends, and changing consumer preferences. You may go over different Insurance Agency business plan examples to get an overview of the current market trends.
5.1 Market Trends
The market size of insurance brokers and agencies in the United States reached almost 182 billion U.S. dollars in 2020 and was expected to further increase in 2021 to just under 186 billion U.S. dollars. Hence, this is the right time to work on your insurance company business model and introduce it in the market. You can reach out to a marketing plan Insurance Agency to help you understand the changing marketing trends.
5.2 Marketing Segmentation
Common characteristics of a market segment include interests, lifestyle, age, gender, etc. It is essential to identify them to determine your target market. Every <sample>sample business plan for insurance company identifies different customer groups. In this marketing plan for insurance company pdf, Lifelong Insurance Agency specifies the following as its’ potential customers:
Business Plan for Investors
5.2.1 Aspiring Young Families
Young families have differing insurance needs, including but not limited to life insurance policies, renters’ insurance, home insurance, and auto insurance. The customers can go through a questionnaire that will identify their needs from an insurance agency. This way they only end up paying for something they need. They will sign up for any insurance as per this insurance sales business plan.
5.2.2 Young Adults
To attract the newer generation, Lifelong Insurance will offer specialized packages for auto insurance, insurance packages for different technologies, most important being computer and phone insurance, and affordable renter’s insurance.
Usually titled as the sandwich group, this group of customers not only has old parents to care for but also children attending higher educational institutes thus making them the primary target for medical and education insurance plans.
5.2.4 Local Businesses
Small businesses have a myriad of insurance needs, from safe harbor accounts to key man life insurance policies, umbrella policies, and defined benefit and retirement plans for their employees. Lifelong Insurance will make sure that its business clientele is satisfied through direct interaction between business owners and the management of Lifelong Insurance.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
5.3 Business Target
- Capture 30% of the market share within 1.5 years of operations
- Charge 25% premium fee on life insurances within 1st year of business
- Negotiate with the local businesses in the building to expand the client base
- Increase returns on interests by 15%
5.4 Product Pricing
As per this business plan insurance company, Lifelong Insurance will opt for competition-based pricing – that is, pricing based on competitor’s prices – which is standard for the insurance industry.
Marketing Strategy of Insurance Agency
Competing for Lifelong Insurance’s business are other independent agents and captive agents offering their ‘brand’ of products and services. Every day, an increased number of insurance carriers are trying to attract the younger target market clients through web and new apps – even eliminating the need for traditional business plans for insurance agencies. These technologically driven businesses are the greatest competitions of Lifelong Insurance which increases the importance of the business keeping up with the times. Hence, a technologically advanced bookkeeping business plan is required.
6.1 Competitive Analysis
- As per this business plan for independent Insurance Agency, Lifelong Insurance will strive to be a low-pressure Insurance Agency of choice.
- Lifelong Insurance will require its clients to take a needs-based exam to determine which needs are being met and which are not. This evaluation is the USP of this sample business plan for Insurance Agency.
- High tech interfaces used by lifelong Insurance will be one of a kind
- We will build long-lasting relationships with our clients through constant communication and demonstrate professionalism.
6.2 Sales Strategy
This insurance agent marketing plan template includes the following sales strategies:
- Online Yellow Pages – Utilize this source to obtain business
- Using online sites like yelp.com or social media like Facebook or Instagram
- Lifelong Insurance will capitalize on word of mouth by requesting referrals
- Collaborate with local safety institutes
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|TOTAL UNIT SALES||5,940||6,296||6,674|
|Unit Prices||Year 1||Year 2||Year 3|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Direct Cost of Sales|
|Subtotal Direct Cost of Sales||$1,323,500.00||$1,543,201.00||$1,717,582.71|
Personnel plan of Insurance Agency
The current plan for management is for George and Martha to go at it alone, however, it is planned to ass in a part time accountant as the clients increase. Considering the load of work, the company may also move towards hiring more agents after the first year. As lifelong insurance wants to see its employees grow, it will provide ample opportunities for the employees to learn enough to get certifications. All the costs associated with human resources are to be accounted for in this business plan for insurance agent.
7.1 Company Staff
Under this Insurance Agency business proposal, these positions will be hired for:
- CFP Agent
- Admin Manager
- Customer Care Executive
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
Financial Plan of Insurance Agency
As per this business plan for Insurance Agency template, Lifelong Insurance’s idea is to increase the premium charges on its different services over time to have greater profit margins. As per this business plan Insurance Agency, our financial analysis of the business estimates that the major revenue of the agency will be obtained from the following sources:
- Personal Auto: 12-15% Commission on New Business, 10-15% on Renewals
- Homeowners & Flood Insurance: 12-20%
- All other sources of revenue
It is important that you analyze multiple Insurance Agency business plan samples to evaluate your financial goals.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.12%||8.20%||8.26%|
|Long-term Interest Rate||8.40%||8.44%||8.47%|
8.2 Break-even Analysis
|Monthly Units Break-even||5340|
|Monthly Revenue Break-even||$132,500|
|Average Per-Unit Revenue||$231.00|
|Average Per-Unit Variable Cost||$0.62|
|Estimated Monthly Fixed Cost||$163,800|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$1,323,500||$1,543,201||$1,717,583|
|TOTAL COST OF SALES||$1,323,500||$1,543,201||$1,717,583|
|Gross Margin %||51.92%||54.40%||58.73%|
|Sales and Marketing and Other Expenses||$145,000||$148,000||$156,000|
|Total Operating Expenses||$561,700||$604,200||$656,725|
|Profit Before Interest and Taxes||$867,300||$1,237,073||$1,787,242|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$22,000||$23,760||$25,661|
|SUBTOTAL CASH FROM OPERATIONS||$73,000||$79,570||$85,936|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$74,000||$79,000||$85,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$69,000||$70,000||$76,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$69,000||$74,520||$80,482|
|Net Cash Flow||$21,000||$23,000||$25,000|
8.6 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$282,000||$315,840||$355,004|
|TOTAL LONG-TERM ASSETS||$24,400||$27,328||$30,744|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$300,000||$329,280||$370,440|
8.7 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.11%||2.34%||2.59%||2.40%|
|Total Current Assets||149.80%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||93.56%||96.09%||98.78%||97.80%|
|Profit Before Interest and Taxes||41.50%||42.62%||43.81%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.08%||74.89%||75.00%||75.00%|
|Pre-tax Return on Assets||96.30%||101.12%||106.17%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.56%||34.60%||35.67%||N.A.|
|Return on Equity||55.80%||57.53%||59.31%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15.6||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$244,000||$257,664||$272,093||N.A.|
|Assets to Sales||0.85||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
Tips on how to Establish a Successful Insurance Agency
If you are taking a gander to initiate an insurance agency, it is necessary to do an intensive background research to get a good understanding of the insurance sector before getting your feet wet. For instance, before you start offering a particular policy, it is exigent to get to the ground and identify the desideratum of the target customers. It is also a requirement to have a strong business plan that you can employ to run and make decisions in the insurance agency. Check out the samples of insurance agency business plans posted online to know how to design yours.
Having a professional business tactics template will save you on time that you would have spent creating your plan of activities from scratch. If you fancy a customized plan, consider seeking professional insurance agency business plan writing services. As mentioned earlier, one of the bankroll remonstrances of scribbling a contrivance is the amount of time and research that is required. Luckily, there are many professional insurance writers, who operate offline as well as online who can help you write insurance agency business plan samples. The charge for this service might be high, but it is better to spend money on a quality service than scribble a mediocre contrivance that will spell doom for your firm.
Results of a SWOT Analysis
Notictious Insurance Agency is focusing on the identification of the multifarious strengths and weaknesses that could promote the organization or lead to its downfall. As a result, we sort the ministrations of a crackerjack business-consulting organization that did a comprehensive SWOT assay. The results of this analysis will succor tract the concourse for success.
Our team was actively convoluted in the analysis and worked with the counsels to warrant that their recommendations were accurate and in line with the goals.
We take the results of the assay very seriously, and we are committed to making sure that we bring into playing the proposed organization recommendations to the letter.
For any business to succeed in the surpassingly vying and digitalized current business world, it needs to identify its core strengths. Business strength is something that sells to the target customers. Our insurance concourse’s core strength is its workforce, which is our insurance faction. Since our inception, we have engaged a team of experts who are committed and determined to warrant that customers get quality services. We have positioned our insurance organization to inveigle millions of prospects who need insurance agency business plans from the first-day operations. We have also invested in a modern application or software that allows us to streamline our insurance concourses and get in touch with our insurance prospects at any time of the day and without spending a fortune.
As a new insurance concourse in the nation, we will desideratum to generate an effective plan to penetrate the market and succeed in getting customers. We understand the insurance sector is very competitive, but we are sure that we have what it takes to tussle in the business with the other insurance concourses that offer similar policies that we plan to offer.
There are unlimited business scopes for our insurance concourse in the market today. We are prime to make sure that we take ascendancy of all business opportunities that come our way and this will greatly help to warrant that we start and uphold to conceive lucre for decades if not centuries.
A weak and unpredictable mercantile is one of the primary threats that could hogtie the surge of our insurance concourse and the insurance business at large. Every business faces its divvy of presage in spite of the verity that it might have a robust system of tackling the demurs. This is the main reason why institutions and the insurance concourses that we plan to rival in the market carries out risk assessment studies regularly to warrant that the concourse is conscious of the business changes in the market.
Another business fulmination that we are keen on responding to as we progress is the establishment of similar insurance agencies in New York. It is our hope that when that happens, we will have invested in business teams that will generate unique and unrivaled policies, which will keep customers streaming into the company.
Needless to say, the many realistic, implementable and winning business strategies that we have been capable to create and establish as credible ways of interacting with customers will surely give us a higher cutting-edge in the market. By providing quality insurance services to our chumps, we will be capable to expand and surge the business fast and warrant that it continues to reign supreme.
It is also importunate to point out that just like any other business or venture entity; the unstable financial markets are a significant threat. Similarly, economic changes and downturns, climate calamities, as well as government policies that do not favor the institutions are ostensible to affect our insurance provision services, but we are prime to handle them all and warrant that the concourse remains profitable.
By payment options, we are referring to the various channels that our customers will use to pay for premiums that they select. Notictious Insurance Agency takes pride in that we have a solid plan created by our finance department. This plan makes sure the prompt receipt of payments without compromising the safety of our clients.
Below are some of the deposit choices that our customers will have to apply to make payments to us on a monthly or yearly basis.
- Deposit by via bank transfer
- Deposit through online bank transfer
- Deposit through check
- Deposit through bank draft
- Deposit with cash
- Deposit through mobile cash platforms
Culmination of the settlement choices listed above will be through credible and reliable banking platforms as well as organization systems to eliminate any errors from occurring.
Advertising and Promotion Strategy
Although our insurance intermediary is different from the others on the earth, we do plan to make sure that we use media stations to advertise it. We are conscious of the fact that most people make a decision to apply the services of a particular insurance agency business plan given their referrals and reputation. Therefore, we will sweat on creating a good credibility and reputation score in the market to contend with the auxiliary insurance companies.
During the promotion of our insurance products, we intend to leverage in both computerized and print media. Our research has shown us that using this medium will save us hundreds of dollars that we can invest in other activities that will further promote the augmentation of the insurance institution.
Here is a list of the primary platforms that we are going to be using to create a brand acquaintanceship of our insurance company and promote the insurance products to our customers.
- We will advertise our organization through countrywide television stations, gazettes, magazines, and AM-FM stations
- We will have our organization TV program that will be discussing the policies that we provide
- We also going to be actively involved in community-based programs
- We will employ social media networks such as Twitter and Facebook to advertise our insurance products and organization
- We will invest in quality billboards that will be installed around the city and in auxiliary areas of the nation that we intend to open the organization offices
- We will consummate road shows from time to time to showcase our insurance policies to our customers
- We will disseminate dodgers and pamphlets to our customers on a monthly basis
- We will expedite rudimentary letters to Diaspora institutions, consulates, and conglomerates to warrant that they too are cognizant of our insurance policies and hopefully they will take up a few
- We will invest in branded vehicles and also brand the commercial buses
- We will encourage our loyal customers to market our products to their peers, friends, and colleagues by offering incentives such as discounts.
- What Is the Easiest Way to Complete My Insurance Business Plan?
The easiest way to come up with a business plan is to take one step at a time. Starting with an executive summary, get an idea of what your company looks like in your head and how you would want to execute it. You can hire professional services to write a business plan for a financial advisor. An expert writer can come up with an excellent business plan template Insurance Agency.
- Where Can I Download an Insurance Business Plan PDF?
There are multiple websites where you can find free PDFs for business plans. Whether it’s a holding company business plan or a Insurance Agency sample business plan, you can find multiple options online.
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.