sample business plan for insurance company

Insurance Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Insurance Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Insurance Agency Business Plan

You’ve come to the right place to create your own business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their insurance companies.

Essential Components of a Business Plan For an Insurance Agency

Below we describe what should be included in each section of a business plan for a successful insurance agency and links to a sample of each section:

• Executive Summary – In the Executive Summary, you will provide a high-level overview of your business plan. It should include your agency’s mission statement, as well as information on the products or services you offer, your target market, and your insurance agency’s goals and objectives.
• Company Overview – This section provides an in-depth company description, including information on your insurance agency’s history, ownership structure, and management team.
• Industry Analysis – Also called the Market Analysis, in this section, you will provide an overview of the industry in which your insurance agency will operate. You will discuss trends affecting the insurance industry, as well as your target market’s needs and buying habits.
• Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
• Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your insurance agency from the competition.
• Marketing Plan – In this section, you will detail your marketing strategy, including your advertising and promotion plans. You will also discuss your pricing strategy and how you intend to position your insurance agency in the market.
• Operations Plan – This section will provide an overview of your agency’s operations, including your office location, hours of operation, and staff. You will also discuss your business processes and procedures.
• Management Team – In this section, you will provide information on your insurance agency’s management team, including their experience and qualifications.
• Financial Plan – This section will detail your insurance agency’s financial statements, including your profit and loss statement, balance sheet, and cash flow statement. It will also include information on your funding requirements and how you intend to use the funds.

Next Section: Executive Summary >

Insurance Agency Business Plan FAQs

What is an insurance agency business plan.

An insurance agency business plan is a plan to start and/or grow your insurance business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your insurance agency business plan using our Insurance Agency Business Plan Template here .

What Are the Main Types of Insurance Companies?

There are a few types of insurance agencies. Most companies provide life and health insurance for individuals and/or households. There are also agencies that specialize strictly in auto and home insurance. Other agencies focus strictly on businesses and provide a variety of liability insurance products to protect their operations. 

What Are the Main Sources of Revenue and Expenses for an Insurance Agency Business?

The primary source of revenue for insurance agencies are the fees and commissions paid by the client for the insurance products they choose.

The key expenses for an insurance agency business are the cost of purchasing the insurance, licensing, permitting, and payroll for the office staff. Other expenses are the overhead expenses for the business office, utilities, website maintenance, and any marketing or advertising fees. 

How Do You Get Funding for Your Insurance Agency Business Plan?

Insurance agency businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Other options for funding are outside investors, angel investors, and crowdfunding sources. This is true for a business plan for insurance agent or an insurance company business plan.

What are the Steps To Start an Insurance Business?

Starting an insurance business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Insurance Business Plan - The first step in starting a business is to create a detailed insurance business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your insurance business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your insurance business is in compliance with local laws.

3. Register Your Insurance Business - Once you have chosen a legal structure, the next step is to register your insurance business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your insurance business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Insurance Equipment & Supplies - In order to start your insurance business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your insurance business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful insurance business:

• How to Start an Insurance Business

Where Can I Get an Insurance Business Plan PDF?

You can download our free insurance business plan template PDF here . This is a sample insurance business plan template you can use in PDF format.

How to build an insurance agency business plan

A great business plan can guide you through every critical early step of building your company. As you start your insurance company , your plan can help you refine your vision, set objectives, and define the details of your business.

Done right, it can help you secure investors, financing, and more. Done poorly or not at all, your new agency may not get off the ground.

Let’s look at the benefits of creating a business plan and what yours should include.

Why do you need a business plan?

Before diving into the details of building a plan, let’s start with why you should write one in the first place.

After all, a good business plan requires careful research, writing, and review. But it’s worth the effort.

Companies that plan grow 30% faster than those who don’t.

A solid plan can help you make sound decisions when you’re first starting out and as you grow. Even down the road, it can help you secure funding from banks and investors. And insurance carriers often want to see your plan before they’ll partner with your agency.

Beyond these benefits and your own peace of mind, creating a business plan can help you:

• Set realistic objectives.
• Allocate resources.
• Streamline workflows.
• Improve communication.
• Grow your business.

Once your business gets off the ground, periodically reviewing your plan is a great way to clarify your goals and refine how you’ll reach them.

A Journal of Business Venturing study has shown that companies that plan grow 30% faster than those who don’t.

How do you write a business plan?

Business plans can be as different as the businesses they describe, but they generally provide highlights of your business in 5,000 words or less.

Your insurance agency plan must define your business strategy if you plan to seek financing. Essentially, your plan needs to be useful to you and intriguing to investors.

Standard business plan templates typically include these sections.

Executive summary

The executive summary is a snapshot of your insurance business.

For an established agency, this section might include its mission statement and detail its past successes. For a startup, the executive summary might highlight the experience of the business owners and their motivation for starting an insurance agency.

For both new and established businesses, you can also include your agency’s general financial information. This might be an overview of your book of business or a list of current investors.

The executive summary is usually the first impression investors have of your business. Make sure it packs a punch and provides a compelling story.

Company description

A company description gets more specific about what your business does on a day-to-day basis.

The company description explains your keys to success. These can be the value you provide to customers and what sets you apart from the competition. Sometimes they’re one and the same. Pinpoint what you bring to the local insurance market, like:

• A prime office location
• Unparalleled expertise
• Unique products

You may want to include a SWOT analysis that details your business’s strengths, weaknesses, opportunities, and threats.

List of products

This section lists every insurance product that your business offers or plans to offer in the future.

Be sure to include product benefits, sales forecasts, and how you plan to acquire and manage the products.

You may also want to explain how independent agents can secure direct appointments with insurance carriers. Many investors may be unfamiliar with this process.

Market analysis

The market analysis shows your understanding of the insurance market in general. And more importantly, where your agency fits in the mix.

If you plan to fill a niche, explain why and how. Either way, describe your target market and the competition.

Potential investors may also want to see specific market goals, such as your target market share along with an explanation of how and when you’ll achieve it.

Marketing strategy

Every insurance agency needs to reach new customers to grow its business and be successful. In this section, outline how you’ll market your business to attract new customers and increase sales to current ones.

Briefly summarize your strategy, including some details like whether you plan to use traditional and/or digital marketing channels. This might also be a good place to share your sales strategy for converting leads into customers.

Organization and management

The organization and management section introduces your executive and management teams, including a summary of their unique qualifications.

Detailing your team’s experience and talent helps establish your agency’s credibility. It also builds trust in your business and leadership team.

You may also want to include an organizational chart that breaks down your business infrastructure and operations.

Financial plan

If your business is looking for funding, you’ll usually need to identify start-up costs and provide five years of prospective financial data. This typically includes:

• Balance sheets
• Income statements
• Cash-flow statements
• Capital expenditure budgets

You may want to include a break-even analysis that delves into the specific profitability of your products. Consider adding a short financial analysis of the most profitable industry trends.

Funding request

If you're seeking investors for your insurance company, add a funding request at the end of your business plan. Typically, a funding request mentions:

• The amount of funding you’re looking to secure.
• An estimate of your future funding needs.
• How you plan to use the funding.
• Your strategy for dealing with developments like a buyout.

If you’re ready to draft your business plan, the Small Business Administration (SBA) provides this business plan template to help you get started.

How to present your insurance agency business plan

Once you’ve completed your business plan, give it a chance to shine in the spotlight.

Presentation matters, so make it professional. Use an easy-to-read font and clear charts and diagrams to illustrate your points. Be prepared to provide both a digital and print version to potential business partners, banks, or investors.

How you present matters, too. Whenever possible, meet in person to build more trust and rapport.

And even though your business plan is full of details, your audience will likely ask you to expand or explain. Come prepared to respond to any potential objections.

Your thorough, compelling business plan can help build the foundation for your success. If you devote the time and energy needed to create a great one, it could pay large dividends for your business.

Complete Insureon’s easy online application today to compare quotes for business insurance from top-rated U.S. carriers. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.

Hannah Filmore-Patrick, Contributing Writer

Hannah is a contributing writer with a diverse writing and content building background. She's worked on topics from technology to insurance. She's competent with both language and SEO, and continues to work with a variety of business verticals to create engaging, optimized content.

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How To Write an Insurance Company Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for insurance companies that want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every insurance company owner should include in their business plan.

Download the Ultimate Insurance Business Plan Template

What is an Insurance Company Business Plan?

An insurance company business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write an Insurance Company Business Plan?

An insurance company business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Insurance Company Business Plan

The following are the key components of a successful insurance company business plan:

Executive Summary

The executive summary of an insurance company business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your insurance company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your insurance company , you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your insurance company firm, mention this.

You will also include information about your chosen insurance company business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of an insurance company business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the insurance industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, the customers of an insurance company may include individuals, families, small businesses, and large corporations.

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or insurance company services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your insurance company may have:

• Specialized industry knowledge
• Proven track record
• Strong customer relationships
• Robust product offerings
• Innovative solutions

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. 
• Or, you may promote your insurance company business via word of mouth.

Operations Plan

This part of your insurance company business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for an insurance company include reaching $X in sales. Other examples include expanding to a new geographic market, launching a new product or service line, or signing on new major customers.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific insurance industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Insurance Company

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Insurance Company

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup insurance company business.

Sample Cash Flow Statement for a Startup Insurance Company

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your insurance company . It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it. All in all, a business plan is a key to the success of any business.  

Finish Your Insurance Business Plan in 1 Day!

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How To Write an Insurance Agency Business Plan + Template

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Launch Your New Insurance Agency With This Business Plan Template

Whether you're a brand new agent or one with several decades of experience, the idea of opening a new insurance agency probably seems daunting—where do you start?

One of the first things you’ll need to do is come up with a business plan for your insurance agency. After all, you can walk into a bank or a potential investor’s office looking for funding, but you won’t get very far unless you have a robust insurance agency business plan that proves you’re on the right track toward turning a profit in the near future.

Follow the steps below when building out your insurance business plan to maximize your chances of securing funding and getting your new agency off to a strong start.

7 Steps To Build Your Insurance Agency Business Plan

1. develop your executive and business summaries..

In business plan terms, the executive summary is the driving force behind your other decisions. It should explain why you’re starting your agency. The business summary is similar, but it should narrow down your “why” into a list of “hows.”

Ask yourself:

• Why do you want to open an agency?
• What types of insurance do you wish to sell?
• What do you hope to accomplish?
• What return on investment do you expect to receive?
• How are you going to generate demand and ensure supply for your service?

Jot your answers down so you can refer back to them as you move forward.

2. Decide whether you want to be a captive agent or an independent agent.

Many large agencies, such as Allstate and Farmers, work with captive agents who can only sell insurance for that specific provider. Independent agents, on the other hand, can sell insurance for multiple providers, but they get locked out of working with the big-name captive carriers who only work with captive agents. (Read more about captive agents here and get a seasoned agent’s POV on both types of agents here. )

Before you can nail down the details of the rest of your business plan, you’ll have to make a choice between these two options.

3. Do a market analysis.

Though it might seem like a tedious process, conducting a thorough market analysis is crucial to your success. Analyzing your local market—including the backgrounds, shopping behaviors, and preferences of your target customers—gives you the insights you’ll need to attract these folks to your business.

Your market analysis will look a little different depending on whether you prefer to be a captive or an independent agent. The state you live in is another factor that will affect your analysis—in fact, it may even influence your decision to be captive or independent.

Take a close look at the demographics of your region.

• How many homeowners live in your state?
• What’s the average insurance premium per home?
• How many people live in each home, on average?
• How many drivers live in your state?
• How many vehicles does the average household own?
• Do you live in an area with an aging population ?
• How many families live in your region?
• What insurance carriers do locals in your state gravitate toward?
• In your area, what might be some successful strategies for retaining clients (rather than just acquiring them)?

These questions are all important, but pay particular attention to the last one. If you open an agency without a plan for client retention, you’re going to struggle. And, unfortunately, this is one of the most overlooked aspects of an insurance agency business plan.

4. Identify where you’ll find your first clients.

It’s one thing to know there are X number of potential clients living in your state, but it’s quite another to have a plan that will help you reach out to those folks and land your first policy sales.

Some investors will require a list of leads before they’ll even consider funding your agency. Even if it’s not a requirement, it’s always a good idea to have a pipeline ready to go. This is where getting set-up for purchasing warm leads from EverQuote can put you in a great position for success.

Plus, tackling this step before you even open your doors will help you better understand the costs you’ll incur—and therefore how much startup funding you will need.

You might also consider other options, such as placing ads in local newspapers, going to networking events, investing in digital marketing, sponsoring local Little League teams, or asking for referrals.

5. Create a financial plan.

Many new agencies fail because their owners overlooked something critical during startup. Do your best to look at your financial plans from every angle:

• Where will you find leads, and how much will they cost?
• What is your advertising budget?
• Does this budget line up with the going rates of local newspapers, billboards, or online ads?
• Do you plan to have 1099 employees or W2 employees selling insurance for your agency?
• How will you decide on a commission and benefits structure for these employees?
• What retention and loss ratios (for clients and employees) do you expect based on the numbers of other agencies in your area?
• How will you handle the delay between policy renewals and income hitting your bank account?
• If there are X amount of people shopping for insurance in your area, what percentage of those people are in a niche you can serve?
• From that percentage of potential clients, how many do you think you can successfully land?
• If you sell policies to these customers, how much will you earn from their premiums?
• How do your projected profits compare to your expected advertising costs, the cost to buy leads, office rent, and other expenses?

Take detailed notes of your calculations, and try to run the numbers a few different ways to obtain a conservative outcome, a likely outcome, and a “best case scenario.”

6. Draw up a formal business plan using a proven format.

Your notes will be incredibly valuable as you move forward, but you’ll need a way to present them clearly and concisely in a way that looks attractive to investors.

Loan officers and investors don’t want to read long-form essays detailing your business background and your ideas for the future. Keep your format simple and straightforward, with clear sections that answer the questions investors will want to know.

We recommend a format similar to the following:

Executive Summary Overall mission Primary objectives Keys to success Financial plans Profit forecast for at least three years Business Summary Business overview Summary of startup costs Funding you’ll require Company executives/ownership Services Services you provide Market Analysis Overall business analysis Details of your competition Buying patterns of your competition Your planned buying patterns Market segmentation and analysis Target market strategies Include details for each market segment Strategy Your competitive edge Marketing strategy Sales strategy Yearly sales projections Key milestones Management Your plan for finding staff Financial Plan Funding you have accepted Funding you will need Detailed startup costs Calculations for your break-even point Projected profit Yearly profit Gross and net yearly profit Anticipated losses, if any Cash flow patterns Plans for balance sheet Calculations of important business ratios

7. Revise and adjust your plan over time.

You may not secure funding for your agency immediately. Even if you do, you’ll likely find that your real world numbers don’t match up exactly with your calculated projections. Plus, carriers frequently change their underwriting policies, and the economy itself is always in a state of flux.

Keep your business plan current by updating the information anytime circumstances change.

Start your journey with a full lead pipeline from EverQuote.

One of the scariest parts about starting a new agency is not being certain where and when you’ll be able to start making sales.

Skip the fear and the unknown and go right to making sales with warm real-time leads from EverQuote. Whether you’re still trying to find startup funding or your doors are already open, you can always boost your business and maximize your chances of a steady income by working with EverQuote.

Connect with us today.

Topics: Featured , Insurance Agency Growth

About the Author Chris Durling, VP of P&C Sales

Chris Durling is a visionary leader in P&C insurance sales and distribution, with over 10 years of experience in the industry.

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Insurance Business Plan Template & Example [Updated 2024]

Insurance Business Plan

If you want to start a successful insurance agency or expand your current insurance business, you need a business plan.

The following sample insurance business plan provides the key elements to include in a successful insurance agency business plan.

You can download our Insurance Agency Business Plan Template (including a full, customizable financial model) to your computer here.

Sample Insurance Agency Business Plan

Below are links to a sample of each of the key sections of a successful insurance agency business plan.

• Executive Summary – The Executive Summary of your insurance agency business plan should include a brief overview of your entire business plan touching on key points such as the insurance products you offer, your target market, and why customers should choose your insurance agency.
• Company Overview – This section should provide an in-depth overview of your insurance company, its history, legal structure, and the milestones you hope to achieve.
• Industry Analysis – In this section, you should describe the insurance industry and any major trends that might impact your insurance business.
• Customer Analysis – In the Customer Analysis section, you should include an analysis of the target customers you plan to serve including demographics and psychographics.
• Competitive Analysis – In this section, you should include information about your competitors, their strengths and weaknesses, and how your competitive advantage will put you above the competition.
• Marketing Plan – In the Marketing Plan section, you should include an overview of your marketing strategy and outline the channels you will use to reach and engage your target customers.
• Operations Plan – The Operations Plan section should provide an overview of the daily operations of your insurance business and outline any systems, processes, and procedures you have in place.
• Management Team – In the Management Team section, you should include information about each key team member and the experience they bring to the business.
• Financial Plan – The Financial Plan section should include a 3 to 5-year profit and loss statement, cash flow statement, balance sheet, breakeven analysis, and other financial projections to demonstrate the success of your agency.

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Insurance Business Plan Outline

How to Create a Business Plan for an Insurance Agency

If the adage is true that even the greatest enthusiasm is no substitute for planning, independent insurance agents know that both are required in order for an agency to succeed.

An insurance agency business plan is therefore essential, especially for brand-new agencies in addition to established firms. A thoughtfully developed plan provides you direction for your efforts and structure for ongoing business development.

Without a plan, all you have is good intentions – and those won’t get you where you want to go. A map, on the other hand, will.

With this in mind, let’s dive into how to create a business plan for insurance agents and the things you’ll need to do to set your agency on the path to success.

Why is an agency business plan important?

A well-constructed insurance agency business plan helps you to set realistic goals, define your needs for specific resources, and focus your attention on the essential must-dos for accelerating your business.

As the principal, you must continually refine your vision for what you ultimately want to achieve: the type of business you want to run, its operations, its cash flow, its culture, and its workflows. Then, you can list the necessary steps to reverse-engineer the ideal agency that you’ve pictured.

Not only will the business plan for your insurance agency serve as a tool for internal management and decision-making, but it’s also extremely useful in conveying the vision for your business to other parties. Among these are investors, lenders, and potential partners – and new insurance carriers will often want to review your agency’s business plan before they’ll partner with you.

It’s worth noting that over time, the business plan for an insurance agency can and will change, and the agency owner must be flexible in both thought and execution as a new agency is forged. For example, you may envision writing a large portion of your agency’s book of business in a certain line, and later discover that market conditions or intense competition will encourage you to pivot to other lines that may also prove profitable.

What should be included in the business plan for an insurance agency

Agency principals will create a comprehensive summary that mindfully considers everything from the agency’s location and target markets to the products it will offer.

To get started, let’s review the various sections that make up a comprehensive business plan, and how each section contributes to the overall plan’s effectiveness.

Your insurance agency business plan should run about 5,000 words, outlining the following in detail:

• An executive summary detailing your “vision” for your agency
• Description of your company
• List of the insurance products your agency plans to offer
• Business analysis of your market
• Your agency’s marketing strategy
• Organizational structure
• Your agency’s financial plan
• Agency funding needs

If you’re already thinking, “I’m not a writer; I can’t do this,” fear not. You’re summarizing what you’re setting out to achieve and how you plan to get there – not writing a sonnet. Once you start writing, you’ll be surprised how far you’ll get.

The aforementioned word count, while a solid goal, isn’t set in stone. Don’t pad what you’re writing; stick to the facts. In the end, your business plan should be thorough, useful to you, and appealing to investors.

Let’s break down each of these sections one by one.

Executive summary

Think of this section as a concise overview of the overall business plan for your agency – your mission statement. Include highlights of your agency’s mission, goals, and its competitive advantage. Highlight your agency’s projected growth and potential profitability.

Be realistic and truthful in your assessments. It’s good to be optimistic, but not pie-in-the-sky level, especially for new agencies. Remember, you could find yourself answering to an investor sometime in the future.

Company description

Here’s where you explain what makes your agency special. Tell your story powerfully. What’s your vision for your organization? How would you describe your company culture ? How do you recruit new talent ?

What is your target market? What are your customer demographics? Who will be selling, and what are their strengths? How do you manage your relationships with your insurance carrier partners? What types of agency technology do you leverage in your customer service efforts?

Offer details on what you consider your unique selling proposition. Do you offer specialization in certain lines of business? If so, explain the inherent value in the expertise you possess.

Keep this question in mind as you write: What makes your firm exceptional, and why would someone want to invest in it?

List of products

The composition of your agency’s book of business is critical , and here you’ll lay out exactly what products you’re selling (or plan to sell). Provide a detailed breakdown of the insurance products and services offered by your agency, including a brief explanation of each product’s features and benefits.

In addition, include ideas for expanding your product lineup in years to come.

Market analysis

Investors and carriers alike want to know that you possess comprehensive knowledge of both your local insurance market and the forces influencing the wider industry. Offer analysis of your agency’s target market, including the demographics of your potential clients.

Then, provide a thorough analysis of the insurance industry’s current challenges and evolving exposures, with emphasis on how those trends affect the types of clients you serve. (This section doesn’t need to be exhaustive – again, don’t pad it – but it should reflect your macro perspective on the P&C market as well as how market forces will factor into your pricing and risk selection.)

Marketing strategy

How do you market your agency to prospects? Do you utilize digital marketing, social media, or create content that will resonate with potential customers? Community engagement is key in endearing your business to local prospects, as are networking events.

Detail your marketing strategy, and explain which types of outreach you’ve found most effective.

Note: As an agency owner it’s especially important to be flexible with your plans in this area, as certain approaches may prove less effective over time. When they do, you’ll need to pivot.

Organization and management

Effective leadership and a clear organizational chart will contribute greatly to your agency’s success. In this section, lay out your agency’s organizational structure – the hierarchy of your leaders. Include profiles of key team members, highlighting their various expertise.

Financial plan

Here’s where you begin to get more detailed on dollars and cents. Offer your realistic financial projections for your agency, taking into account expenses, revenue, and projected profitability.

Your projections should include a breakdown of any and all financial forecasts and possible variables taken into consideration. Contingency plans to address potential financial challenges should likewise be included.

Agency funding

Your agency’s financial needs are assessed in detail here. Apply your knowledge of what you want your agency to achieve, versus what it will cost. This includes (but is not limited to) rent, payroll, utilities, phone service, and business insurance.

Include the purpose behind each expenditure, and demonstrate how funding for your firm will be used to cultivate growth.

By the time this section is complete, you’ll have an informed understanding of exactly what it will cost to fund your organization – and how much you may need to borrow to manifest your vision. Provide an outline of potential sources of funding, including personal investments, loans, or investors.

What is the Best Business Structure for an Insurance Agency?

There are several business structures you can consider for your agency, each with various benefits. These include:

• Sole proprietorship
• Partnership
• Corporation

There are various legal, financial, and operational factors to consider in selecting the structure that’s best for you, which we’ll explore in greater detail in a future blog.

How your insurance agency business plan will evolve

As your agency evolves over time, so too will your firm’s business plan. It’s best to revisit and refine your overall plan at least every seven to 12 months, in order to chart your progress and adopt new strategies that will help to continuously drive revenue.

The path to agency success is long and at times extremely difficult, but thoughtful planning will aid your firm’s execution and growth for years to come.

About Renaissance

Powered by a differentiated suite of technology products and services, Renaissance drives organic, profitable revenue growth for your insurance agency.

Keep Reading

How insurance agencies can benchmark their success, how independent insurance agents can raise the bar on customer service, 4 strategies for growing your independent insurance agency.

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Top 5 Insurance Business Plan Templates with Examples and Samples

Success in the insurance business is not about avoiding risks, but rather understanding and managing them effectively.

- Warren Buffett

With his remarkable business acumen, Warren Buffett shares a profound quote that captures the essence of what it takes to succeed in the insurance industry. In a world filled with uncertainties, insurance serves as a safety net, providing individuals and businesses with financial protection against unforeseen events.

Insurance agency leans on insurance business plan templates as their trusted allies, helping them through the complexities of the industry. These templates offer an insurance broker/ insurance agency structured framework to clearly define goals, strategies, and financial projections.

In this blog post, we are here to lend a helping hand and introduce you to some of the best insurance business plan templates. Whether you're venturing into a new start-up in some type of insurance like, home, life, health, automobile insurance or seeking to revamp your current insurance plan, these templates will serve as your guiding star by unveiling the finest selection of insurance business plan templates.

Elevate Your Planning with These Top 5 Insurance Business Plan Templates

Template 1 - insurance business plan powerpoint presentation slides.

This insurance business plan template presents a captivating blend of functionality and aesthetics. This content-ready PPT slide showcases the critical success factors, mission, vision, and start-up summary, while also incorporating a potential growth analysis, including SWOT analysis and Porter's five force analysis model, customer analysis, and market sizing. While adopting an appealing color palette of soothing blues, vibrant yellows, and sophisticated greys, this engaging color blend evokes a sense of trust, professionalism, and stability that are essential attributes in the insurance industry and also instils confidence in your brand. Check out more about this template here.

Download Now!

Template 2 - Insurance Business Plan Word Document Template

Designed with meticulous attention to detail, this template offers a versatile solution for insurance agencies, brokers, and professionals. It includes comprehensive sections covering every vital aspect of an insurance business plan. It encompasses market analysis, target audience identification, marketing strategies, financial projections, risk assessment, and growth plans. Its inclusive approach ensures a thorough and well-rounded plan. Get your hands on it now and leave your audience in awe with each and every delivery.

Template 3 - Insurance Business Plan PowerPoint Template Bundles

This template offers twelve slides with high-quality visuals, graphics, and images to showcase your expertise effectively. Each slide focusses different aspects of insurance, making information interpretation easier for your audience. The well-researched content stimulates strategic thinking, ensuring your message is conveyed with ease. The design's standout feature is its editable elements, allowing customization of colors, fonts, backgrounds, and more. Grab this template now for unique and captivating presentations every time.

Template 4 - Market Share Assessment for Insurance Business Plan

This ready to use PPT template is expertly designed to highlight market share assessment for an insurance business plan. It consists of a pre-built pie-chart to exhibit the scenario of a market place of insurance companies.  Discuss different insurance market characteristics and help your audience make informed decision with this pre-designed PPT slide.  Grab your copy now and confidently deliver a persuasive presentation that convinces your audience.

Template 5 - Business Insurance Actionable Steps Template

This ready-made PPT template covers the usage of insurance plan for organizations. Use this flexible PPT diagram and craft a compelling presentation to persuade your audience to invest in different insurance options that safeguard their finances and assets. It offers a structured approach, ensuring that the plan aligns with goals and captures the attention of stakeholders. With its visually appealing design, compelling graphics, and concise text, convey complex information in a clear and impactful manner.

Using business plan templates for an insurance broker agency is a game-changer. It streamlines the planning process, ensuring a clear roadmap for success. We have highlighted the top 5 insurance business plan templates and examples, showcasing their effectiveness in guiding your business strategy. Don't miss out on this opportunity to leverage these templates as a springboard for your own business plans, tailoring them to suit your unique goals. For further assistance, we recommend exploring additional resources and tools that can enhance your business planning journey. Check out this page to unlock your agency or brokerage's full potential.

FAQs on Insurance Business Plan

What is an insurance business plan.

An insurance business plan is a detailed roadmap that outlines the goals, strategies, and operations of an insurance company. It holds significant value in the insurance field to set clear objectives, identify target markets, and determine financial projections. For insurance startups, strong business insurance guides the company, lures investors, and ensures essential licenses.

How to start an insurance startup?

To start an insurance agency, one can conduct thorough market research, define your target audience, obtain necessary licenses, develop a comprehensive insurance business plan, establish strategic partnerships, leverage technology, and create a marketing strategy. Adapt and evolve

your strategies to seize industry opportunities.

What are the 4 types of insurance?

The four types of insurance are Health, Life, Home & Automobile insurance. Health insurance helps with medical expenses, life, and annuity insurance provides financial support to loved ones after you pass away, home/property and casualty insurance covers damage or theft of your property, and automobile insurance protects against car accidents.

What are the 7 main types of insurance?

The seven main types of insurance are Property, Marine, Fire, Liability, Guarantee, Social & Life, and annuity insurance. These cover various aspects, including financial support after death, coverage for marine-related risks, liability-related risks, guarantees, social welfare benefits, and protection for damaged assets and personnel injuries by taking property and casualty insurance.

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Insurance Agency Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Financial Service Industry » Insurance Agency

Are you about starting an insurance agency ? If YES, here is a complete sample insurance agency business plan template & feasibility study you can use for FREE .

To become an Independent insurance agent means that you have an insurance agency. The agents are also known as insurance sales agents.

These folks are involved in the sale of a variety of insurance and financial products; some of the products they deal in include; property insurance and casualty insurance, life insurance, health insurance, disability insurance, and long-term care insurance.

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Insurance agencies sell insurance policies that defend individuals and businesses from financial loss that is brought about as a result of automobile accidents, fire, theft, storms, and other events that can damage property.

This is one of the reasons why many people have become so inclined to insurance that they dare not live without it. Therefore, this is one of the areas where having an insurance agency comes in handy.

A Sample Insurance Agency Business Plan Template

Industry overview.

The insurance industry is wide and global in nature; there are numerous aspects anyone interested in starting an insurance agency could choose to specialize in.

For instance; in the United States of America and even in Canada, pet insurance is one aspect of insurance that is gradually opening up and it is interesting to state that it is a very promising market.

Anyone looking towards starting an insurance agency has the option to choose an area of insurance to specialize in or they could choose to start a general insurance company; an insurance company that is involved in the selling of life insurance policies, health insurance policies, auto/car insurance policy and liability insurance amongst others.

The united states of America have the largest insurance market in the world as indicated by the volume of premium payments.

Statistics show that in 2013 alone, out of the total sum of 4.640 trillion US dollars of gross premiums written on a global scale, 1.274 trillion US dollars which translates to 27% were actually written in the United States of America.

This goes to show how big the insurance industry is in the United States of America. Independent insurance agents characteristically show a lot about insurance companies that meet the needs of their clients.

Running an insurance agency means that insurance agents have to be very well trained and knowledgeable about the difficulties of the insurance market and insurance law.

Getting a hang of this means that an insurance agent is able to advise their clients about appropriate amounts of insurance and insurance coverage for their particular needs.

More often than not, independent insurance agents work hand in hand with insurance mediators, in getting quotes from multiple insurance providers and then they go ahead to license them off to the independent agents.

Working with an insurance intermediary service allows the independent agent to appraise many quotes and offer their clients the best policy options ever.

There are a good number of major trade organizations that back the interests and needs of the independent insurance agent; some of them are Agents for Change, The National Organization of Life and Health Agents (NOLHA), the Independent Insurance Agents & Brokers of America, amongst many others.

Starting an insurance agency is a wonderful idea, but a whole lot has to be in place and it includes; getting an insurance license from the organization regulating the insurance industry like the National Association of Insurance Commissioners that regulates the industry.

No doubt, the process of obtaining an insurance agency license might not come too easy, because of the laid down criteria in which the whole process entails an insurance licensure examination is required if you want to start an insurance agency.

If you are serious and determined, you could write and pass the exam in one sitting, but if not, then you should be ready to take the exams over and over again. The bottom line is that these exams do not come cheap; so you must prove your worth before you can be issued a license.

In some countries trust is one of the key factors that may want to slow down the growth of the insurance agencies. Apart from that, then the insurance agencies just like insurance companies are really growing. The industry is a very profitable one with a lot of room for more prospects.

Executive Summary

May Flora brokers is a general insurance agency and were incorporated under United States law as a private Limited Liability Company. It has plans in the nearest future to transform into a public limited liability company. This is so that we can get listed on the New York Stock Exchange.

We will launch the business in heart of New York City – New York where we will have our headquarters and later spread to other major cities in the United States of America.

May Flora Insurance brokers were established with the sole directive of conducting insurance businesses in a highly professional, ethical, and customer-driven approach. We are aware that businesses these days require diverse and sophisticated approaches, which is why we will offer our clients the very best of deals at all times, and all around the year.

We are glad to find ourselves in a hub like the New York insurance market and this is why we have decided to kick start by dealing in various insurance policy covers such as:

Life and Annuities Insurance, Health/Medical Insurance, Car / Vehicle Insurance, Pet Insurance, Agricultural Insurance, Aviation Insurance, Financial Reinsurance, Guaranteed Asset Protection Insurance, Group Insurance, Inland Marine Insurance/Marine Insurance/Shipping Insurance, Travel Insurance, Liability Insurance/ Professional Liability Insurance and Property and Casualty Insurance, and what have you.

At May Flora Brokers, our client’s best interests come first, and everything we do is guided by our professional ethics. We will ensure that we are committed to competence, integrity, innovation, and excellent customer service. We will also guarantee that we only hire employees who are well experienced to help us drive the business.

We plan to hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely. We will promote a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees, and for our clients.

May Flora is poised at all times to demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

May Flora brokers were founded by a group of New York-based investors led by Andrew Basher, Andy Ruthless, and Mr. Ruddy Frumpy. The organization will be managed by these three, as well as other partners who will work in the background. Andy Basher graduated from the University of California – Berkley (First Degree), Brock School of Business at Stamford University (MBA), and University of Harvard (PhD.).

He has extensive experience in a senior managerial role with some of the world’s leading insurance companies. He will be bringing his wealth of experience and expertise to help grow May flora Brokers to become a world-class insurance company.

Our Product and Services

May flora Brokers is going to offer varieties of insurance products and services within the scope of the insurance industry in the United States of America.

Our intention in starting our insurance agency is to make profits from the United States market and we will do all that is permitted by the law in the U.S. to achieve our aim and business goals. Our products and service offers are listed below;

• Life and Annuities Insurance policy cover
• Health/Medical Insurance policy cover
• Car/Vehicle Insurance policy cover
• Pet Insurance policy cover
• Agricultural Insurance policy cover
• Aviation Insurance policy cover
• Financial Reinsurance
• Guaranteed Asset Protection Insurance policy cover
• Group Insurance
• Inland Marine Insurance/Marine Insurance/Shipping Insurance
• Travel Insurance policy cover
• Liability Insurance/ Professional Liability Insurance
• Property and Casualty Insurance policy cover
• Consulting and Advisory Services (Within the Insurance Business)

Our Mission and Vision Statement

• Our vision is to be one of the foremost insurance brokers to make available a wide range of insurance products at an affordable price in the United States of America.
• Our mission is to be listed as amongst the top 20 insurance companies based on revenue generations ( premium collections et al ), trust, and ease of doing business.
• We will ensure that our clients get their claims as when due without unnecessary delays.

Our Business Structure

We plan to use the best structures to build our insurance agency. This is vital because we want to be known as a standard organization. May flora Brokers will build a solid business structure that can support the growth of our insurance agency. We will leave no stone unturned in seeing that we hire competent hands to help us build the business of our dream.

The fact that we want to become one of the leading insurance agency brands in the industry in the whole of the United States of America makes it highly necessary for our organization to deliberately build a well–structured business from the onset. Below is the business structure that we will build May flora insurance brokers on;

• Chief Executive Officer

Legal Secretary

Head of Premium Collections

Head of Claims

Admin and HR Manager

• Marketing Executive
• Customer Care Officer

Front Desk Officer

Job Roles and Responsibilities

Chief Executive Office – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board
• Responsible for drawing up contracts and other legal documents for the company
• Produces information by transcribing, formatting, inputting, editing, retrieving, copying, and transmitting text, data, and graphics; coordinating case preparation.
• Provides historical reference by developing and utilizing filing and retrieval systems; records meeting discussions; maintains transcripts; documents and maintains evidence.
• Responsible for the collection of premiums for the organization
• Works with software developers to develop efficient and easy-to-use premium collection software
• Advises the organization from time to time on how to improve and increase premium collections
• Collaborates with the head of sales and marketing to ensure that our insurance policies holders do not allow their policies to lapse
• Follows up on premium payment and send reminders from time to time to our policyholders to pay their premium
• Responsible for resolving any premium issues with our bank and policyholders.
• Responsible for the payment of claims to policyholders that files for claims
• Ensures that proper investigations are carried out before claims are paid
• Reviews the organizations’ claims policy from to time to time to make it efficient and measure up with best practices in the industry.
• Keeps proper record of claims that are paid out by the organization
• Supervises the claims department
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation, and assessment of employees
• Responsible for arranging travel, meetings, and appointments
• Oversees the smooth running of daily office activities.

Marketing/Sales Executive

• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocating for the customer’s needs, and communicating with clients
• Develops, executes, and evaluates new plans for expanding increase sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides management with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risk analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as an internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS, or phone) provide the client with a personalized customer service experience of the highest level
• Through interaction with students on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the school coordinator in an effective and timely manner
• Consistently stays abreast of any new information on the schools’ products, promotional campaigns, etc. to ensure accurate and helpful information is supplied to students when they make inquiries
• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Receives parcels/documents for the organization
• Handles inquiries via e-mail and phone calls
• Distributes mail in the organization
• Handles any other duties as assigned by the Admin / HR manager

SWOT Analysis

May flora insurance brokers know that it will be in our best interest to identify our strengths and weaknesses; this is exactly why we engaged the services of a core professional in the area of business consulting and structuring to assist the firm in building a well–structured insurance agency that can favorably compete in the highly competitive insurance industry/market in the United States.

Part of what our team of business consultants did was to work with the management of the organization in conducting a SWOT analysis for May flora insurance brokers. Here is a summary of the result of the SWOT analysis that was conducted on behalf of May flora brokers. Before that, it is important to state that we have taken this really seriously.

It is compulsory for a business to have a record of its core strength. Its core strength lies in the power of our team; our workforce. We have a team that can go all the way to give our clients value for their money. We are well positioned and we know we will attract loads of clients from the first day we open our doors for business. We also have an efficient and effective customized software application that will help carry out seamless insurance activities.

As a new insurance agency in the United States, it might take some time for our organization to break into the market; that is perhaps our major weakness.

• Opportunities:

The opportunities in the insurance industry are massive and we are ready to take advantage of any opportunity that comes our way which is why we are going to be offering several insurance policies/packages.

One thing is certain, a weak economy is one major factor that is limiting growth opportunities for the insurance industry. Come to think of it, there is hardly any business or investment opportunity that does not come with its own fair share of threats and challenges. This is why most organizations conduct risk assessments on a regular basis so as to enable them to produce strategies that will help them stay afloat in the industry.

Another major threat and challenge that we are likely going to face when we start our insurance business are, of course, the arrival of other insurance agencies in the same location where ours is located and perhaps selling the same insurance policy covers as we do.

For sure if we have been able to come up with workable and winning strategies that will help us outsmart our competition in the location where our insurance agency is going to be located. With that, we are likely not going to struggle to grow our insurance company and also retain some of the best hands under our employment.

Over and above, just as in any other business and investment vehicle, economic downturn, unstable financial market, natural disasters, and unfavorable government economic policies can hamper the growth and profitability of an insurance company.

MARKET ANALYSIS

• Market Trends

One common trend is that, in the insurance industry, it is only the smallest insurers that exist as Single corporations. It is the practice in the insurance industry for most major insurance agencies to exist as insurance groups; they usually partner with holding companies.

This practice has loads of benefits and as a matter of fact, insurance groups are known to survive the turbulence in the insurance industry year after year and the survivability of single insurance agencies is pretty low. This is why you may hardly find an insurance broker that is not into the sale of various insurance policy covers ranging from motor vehicle insurance policies to pet insurance policy cover to marine insurance policy covers et al.

Another trend in the insurance industry is the creativity in premium collections. Most insurance agencies know that the survival of their business lies in the regular payment of premiums which is why they have to go all the way to put systems and processes in place that will help the collect premiums from the policies holders with ease.

If you keep tabs on successful insurance companies you will realize that they leverage on technology (internet and software applications et al) in running their business.

Our Target Market

Although May flora insurance brokers will initially serve the small to medium-sized markets in and around New York City – New York, that does not in any way stop us from growing to be able to compete with the leading insurance companies selling our insurance policies in the cities in the United States.

We hope to someday merge or acquire other smaller insurance companies and expand the sales of our insurance products and business beyond the shores of the United States of America.

As a standard insurance company, May flora has a range of insurance policy covers and we will also work hard to continue to add more insurance covers that are on sale in the insurance market in the United States of America hence expanding the scope of our target market from time to time.

Our target market cuts across people of different classes and people from all walks of life, local and international organizations as well. We are coming into the industry with a business concept that will enable us the sale of insurance policies to the highly placed people and companies in the country and at the same to the lowly placed people and smaller businesses.

In other words, our target market is the whole of the United States of America and subsequently other parts of the world. Below is a list of the people and organizations that we have specifically designed our products and services for;

• Students, Young Adults, The Elderly, and Children et al
• Businesses and Entrepreneurs
• Blue Chips Companies
• Corporate Organizations
• Manufacturers and Distributors
• Real Estate Owners, Developers, and Contractors
• Research and Development Companies
• The Government (Public Sector)
• Schools (High Schools, Colleges, and Universities)
• Sport Organizations
• Entrepreneurs and Start-Ups

Our competitive advantage

A close study of the insurance industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer-centric, and proactive if you must survive in the insurance industry. We are aware of the stiffer competition and we are well prepared to compete favorably with other leading insurance companies in the United States.

May flora insurance brokers might be a new entrant into the insurance industry in the United States of America, but the management staff and board members are considered gurus. They are people who are core professionals and licensed and highly qualified insurance practitioners in the United States. These are part of what will count as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups insurance companies) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

SALES AND MARKETING STRATEGY

Starting and running an insurance agency requires aggressive marketing which is why you have insurance salesmen and women who are always on your neck to market/sell one insurance cover or the other especially if you live in the United States of America.

So to stay afloat in the insurance industry, you must be ready to spend good cash on marketing, advertising, and promoting your insurance products. Your marketing and advertising departments must regularly come out with new innovations and products that can catch the attention of your potential clients.

This is why when we were drafting our marketing ideas and sales strategies for our insurance agency, we ensured that we created a compelling personal and company profile that include the profile of our board of directors and management team.

The truth is that if you have honest, trustworthy, and successful professionals on your board, customers can easily trust you with their hard-earned money. In some countries trust is one of the key factors that is hampering the growth of the insurance industry.

Nobody wants to buy insurance policies, pay premiums,s and is not certain if they can get claims when the time comes. Here are some of the platforms we will utilize to market our insurance policies;

• Introduce our business (insurance policy covers) by sending introductory letters alongside your brochure to individuals, investors, and corporate organizations
• Advertise our business in relevant business magazines (insurance magazines and business-related magazines) and be available for insurance-related talk shows and interactive sessions on TV and Radio stations)
• List our insurance company on local directories/yellow pages (both online and offline)
• Attend expos, seminars, and business fairs to network and sell our insurance policy covers
• Leverage the internet to promote our insurance business/insurance policy covers
• Join local chambers of commerce around us with the main aim of networking and marketing our insurance products.
• Engage the services of marketing executives and sales agents to carry out direct marketing of insurance products.

Sources of Income

May flora Insurance brokers are established with the aim of maximizing profits in the insurance industry and we are going to go all the way to ensure that we do all it takes to sell our insurance products to a wide range of clients and also ensure that we don’t struggle to collect premiums on a regular basis.

May flora Insurance agency will generate income by selling the following insurance policy covers to both individuals and organizations;

• Liability Insurance/Professional Liability Insurance

Sales Forecast

As long as there are people living in the United States of America and businesses starting and growing in the U.S., they will always purchase one insurance policy cover or the other.

We are well positioned to take on the available market in the U.S. and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operations and grow the business and our clientele base beyond New York City, New York to other states in the U.S. and even the global market.

We have been able to critically examine the insurance market and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in New York.

Below is the sales projection for Mutual Trust Insurance PLC, it is based on the location of our insurance company and the wide range of insurance products that we will be offering;

• First Year-: $500,000
• Second Year-: $1, 500,000
• Third Year-: $3,000,000

N.B: This projection is done based on what is obtainable in the industry.

• Our Pricing Strategy

When it comes to pricing products in the insurance industry, there is an established trend and in most cases, it is determined by the risk involved in the products/insurance policy covers. The calculation is usually done by experts.

Despite the fact that there are expected price standards for various insurance policy covers, one of the easiest ways of getting into the market is to sell your insurance products a little bit below the industry average and that is exactly what we are going to do.

• Payment Options

There is the need to have several payment options. At May flora insurance brokers, our payment policy will be all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that we will make available to our clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft
• Payment with cash
• Payment via mobile money platforms

In view of the above, we have chosen banking platforms that will help us achieve our plans with little or no itches.

Publicity and Advertising Strategy

The insurance business just like any other business requires media hype to get people to buy into the brand. We are aware that our brand has to do with the way people perceive our organization to be which is why we are going to be deliberate when it comes to communicating and promoting our brand.

In promoting and advertising our brand and insurance products, we are going to leverage both print and electronic media. As a matter of fact, it is cost-effective to use social media platforms to promote our brands, besides it is pretty much effective.

Here are the platforms we will leverage to create brand awareness for your insurance company and to promote our insurance products in the marketplace;

• We will place adverts on national TV stations, Radio Stations, and Newspapers/Magazines
• We will run our own special TV program (insurance-based program)
• We will sponsor relevant community programs
• We will leverage the internet and social media platforms like; Instagram, Facebook, Badoo, YouTube, Twitter et al to promote and advertise insurance products
• We will install our Bill Boards in strategic locations all around New York City – New York and other cities in the U.S.
• We will engage in road shows from time to time to create awareness of our insurance company and to sell our products
• We will distribute our fliers and handbills to targeted areas from time to time
• We will send out introductory letters to multinationals, embassies, and diaspora organizations and networks in and around New York City
• We will encourage the use of word of mouth, especially from loyal customers
• We will ensure that all our vehicles are branded with our company’s logo

Financial Projections and Costing

When it comes to starting an insurance agency, you should be aware that the cost is two fold; the cost of setting up the office structure (including branches) and of course your capital base/capitalization. In essence, the nature and size of the insurance company you are looking toward starting will determine the amount you are expected to raise.

As regards the cost of setting up the office structure , your concern should be to secure a good office facility in a busy business district; it can be expensive though, but that is one of the factors that will help you position your insurance company to attract the kind of customers you would want to do business with.

These are the key areas we will spend the bulk of our start–up capital on;

• The Total Fee for incorporating the Business – $750.
• The budget for insurance policies, permits, and licenses – $10,000
• The Amount needed to acquire a suitable Office facility in a business district in New York City with 6 months’ rent up–front (Re-Construction of the facility inclusive) – $50,000.
• The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets, and electronics et al) – $5,000
• The Cost of Launching our official Website – $600
• Budget for paying at least 10 employees for 3 months and utility bills – $200,000
• Additional Expenditure (Business cards, Signage, Adverts, and Promotions et al) – $2,500
• Capital Base – 1 Million Dollars
• Miscellaneous – $10,000

Going by the report from the research and feasibility studies conducted, we will need about 1.2 Million U.S. Dollars to set up a small-scale but standard insurance company in the United States of America.

Generating Funding/Startup Capital for May flora Insurance Brokers

Our insurance brokering form is going to start as a private Limited Liability Company but with a plan in the nearest future to transform into a public limited liability company so as to enable us to get listed on the New York Stock Exchange. In essence, the business will be financed by Dr. Wilcox Carrington, Mrs. Ruth Ferguson, and other members of the partnership.

These are the areas we intend to generate our start-up capital;

• Generate part of the start–up capital from personal savings
• Source for soft loans from family members and friends
• Apply for a loan from my Bank

N.B: We have been able to generate about $700,000 (from every member of the partnership with the bulk of the money coming from the lead partners Dr. Wilcox Carrington and Mrs. Ruth Ferguson). We are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

BUSINESS GROWTH: Sustainability and Expansion Strategy

It is easier for businesses to survive when they have a steady flow of business deals/customers patronizing their products and services. We are aware of this which is why we have decided to sell a wide range of insurance products to both big and small clients, individual clients, and corporate clients as well.

We know that if we continue to sell our insurance products and continue to collect premiums on a regular basis, there will be a steady flow of income for the organization. Our key sustainability and expansion strategy is to ensure that we only hire competent employees, and create a conducive working environment and employee benefits for our staff members.

In the nearest future, we will explore the options of either merging with another insurance companies or acquiring one or more insurance companies in order for us to increase our market share. We know that if we implement our business strategies, we will grow our insurance business beyond New York City, and New York to other states in the U.S in record time.

Check List/Milestone

• Business Name Availability>Completed
• Business Incorporation: Completed
• Application for Insurance License: Completed (Collected)
• Opening of Corporate Bank Accounts at various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID:  Completed
• Application for business license and permit: Completed
• Purchase of All forms of Insurance for the Business: Completed
• Conducting Feasibility Studies: Completed
• Generating part of the start-up capital from the founders: Completed
• Applications for Loan from our Bankers:  Completed
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents:  Completed
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing/Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, office equipment, electronic appliances, and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the industry: In Progress.

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Insurance Company Business Plan

Executive summary.

By focusing on its strengths, its present client base, and new value priced products in the next year, Acme Insurance plans to increase gross sales by 10% and profit by 15%.

Our Keys to Success and critical factors for the next year are, in order of importance:

• Identify “Target Markets.”
• Institute our Property inspection program.
• Begin our “Insurance Partners” program.
• Develop a profitable property program.
• Provide small businesses with an affordable basic business package.

Acme Insurance Incorporated has been profitable, but recently we have had declining market share and this must be addressed. Therefore our goals are:

• To re-establish Acme Insurance Inc. as the market leader in quality and value-priced insurance products in Smalltown District.
• Establish good working relationships with our present insurance markets by meeting with their decision makers and plotting a mutual plan for success. Get commitments for support and products that we can market in our trading area starting April 1st of Year 1.
• Investigate new markets that meet our marketing criteria by a) committing to small rural brokerage; b) providing products suitable to our economic and social climate; and c) plans for the upload and download of insurance policies.
• Provide sales incentives to staff to meet sales goals of 10%.
• Complete inspection of all Pilot homeowners within one month before renewal date.
• Formulate plans to acquire another brokerage

Acme Insurance Inc. is dedicated to providing insurance products that provide quality protection with value pricing. We wish to establish a successful partnership with our clients, our staff members, and our insurance companies, that respect the interests and goals of each party.

Success will be measured by our clients choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and expertise.

In order to implement our strategic goals, we will focus on developing the following tools.

Knowledgeable, friendly staff that can empathize with our consumers needs and circumstances, especially in handling a loss. Policies that meet or exceed the expectations of our clients, and that are affordable, available, and understandable. Policies and endorsements delivered on time with minimal errors. A commitment to an annual insurance review for all of our clients. A phone call is more than any direct mass marketer offers. We believe personal contact and service is the cornerstone of our success.

Acme Insurance primarily markets and services Personal Lines Insurance. Its customers are mostly rural, lower income families or long time resident senior citizens who demand value priced insurance premiums in keeping with their lower and fixed incomes.

We also provide insurance to small business, mostly family-run seasonal operations primarily focused on the tourist trade.

Acme Insurance is a privately incorporated company in the Smalltown district and is licensed to transact both Life and General Insurance. The shares are held equally by John Smith and Peter Smith.

Our Insurance and Real Estate brokerage operates from two central locations. Our modern attractive office in Smalltown, at 178 Small Street, is located in a small plaza which is owned by the principals of our brokerage. It comprises 2,000 square feet.

In Nexttown, we operate from an 800 square foot, one-story brick veneer building overlooking Lake Small, which again is owned by the principals of our firm. The office is strategically located across from the Post Office.

We have stressed to our insureds the importance of good communication between the broker and client to insure proper coverage is in place. We have noticed as our clients become better informed about insurance that there has been a tremendous increase in clients wishing in-depth discussions about their policy coverage and how they can get the most value for their insurance dollar.

Our company’s strength lies in the quality and depth of our products and staff. Our offices, unlike our competition, are open six days a week. Because of our larger staff, we are able to service our clients even when a client’s broker is busy or out of the office on inspections.

Our staff has specialists in commercial insurance that can properly service and underwrite local business. We also have some quality commercial markets unavailable to our competition.

Our Real Estate division, which is a separate company, helps with market value and replacement cost analysis when required.

The past few years have seen tremendous upheaval in the insurance industry. The number of players has decreased in both the broker and company communities. The recession has curtailed insureds from properly maintaining their homes and automobiles, and insurance fraud has become a major issue for the entire insurance industry.

Brokers are concerned that in spite of commission reductions, quotas, contract cancellations, and refusal to write new auto business by some markets, they now may find themselves in competition with some of the traditional broker distribution companies that are setting up direct marketing facilities and branches. The banks now have announced they will open stand alone insurance offices to retail insurance.

In spite of the above, we believe that the independent broker will survive. We are more automated than most service industries. We are close to the customer, regardless of some insurance companies’ attempts to sever the traditional broker-client relationship. Our clients, in most cases, still do not care or know which company we place them with. They trust our judgement in selecting the proper coverage and company to place them in.

Upload/download capabilities are in many brokers offices, including our own. This will cut costs, improve efficiency and accuracy, and help us meet the competition from banks and direct writers. Companies that truly value and trust the broker distribution system will align themselves with professional brokers and grant more underwriting authority similar to Lloyds.

Among the substitutes that are our main competition we have Local independent brokers, Agents (such as Co-operators), Mass Markets, Mass merchandise programs heavily advertised over the radio such as “Gray Power”, and Group Plans.

We have depended in the past on a small advertisement in our local newspaper, listings in the Yellow Pages, and word of mouth. However with the changes in the market today, we must begin to investigate alternate ways to put our name in front of the public. We have set out several criteria for our marketing campaign that include”

• All advertising has to emphasize our differentiation point rather than price.
• We must sell the company, not the product. In spite of some companies’ efforts to minimize the importance of the broker, our clients still identify with the broker, not the insurance company.
• We must improve and increase our contacts with our clients.
• Make contacts and support senior citizen groups and cottage associations.

Based on these changes in our goals, outlook, and company culture, we anticipate that we will be able to increase revenues substantially by year 3 of the plan and increase net profit handsomely. The company does not anticipate any cash flow problems.

1.1 Mission

1.2 objectives.

• Investigating new markets that meet our marketing criteria by a) committing to small rural brokerage; b) providing products suitable to our economic and social climate; and c) plans for the upload and download of insurance policies.
• Formulate plans to acquire another brokerage.

1.3 Keys to Success

We believe the keys to success in a small town insurance business are:

• Knowledgeable, friendly staff that can empathize with our consumers needs and circumstances, especially in handling a loss.
• Policies that meet or exceed the expectations of our clients, and that are affordable, available, and understandable.
• Policies and endorsements delivered on time with minimal errors.
• A commitment to an annual insurance review for all of our clients. A phone call is more than any direct mass marketer offers. We believe personal contact and service is the cornerstone of our success.

Company Summary

2.1 company ownership, 2.2 company history.

Acme Insurance was founded as a sole proprietorship in 1938 and was owned and operated by the founder Stan Smith. He originally ran the operation from his home, but moved to the business section of Smalltown when he outgrew his home based operation.

In 1972, the company constructed a new office building in the main business section and over the course of the last 15 years has purchased four other brokerages, one of which led to the establishment of our branch office in Nexttown.

In 1988, a new company was formed “Acme Insurance Inc.” which bought the insurance business from “Acme Insurance Limited.” All shares in the new company are owned by John S. Smith and Peter Smith.

Today, the fourth generation of Smiths, Stephen and Jason Smith, are working in the firm. We are also gratified to report that our founder, Stan Smith, is still in our office every day, and although still licensed, he is only active in a “goodwill ambassador” capacity.

2.3 Company Locations and Facilities

Our Smalltown operation enjoys its own private parking lot for our clients and our staff. A second story was recently added to our office which will allow ample room for expansion. It is presently used for training, staff meetings, and conferences.

Acme Insurance is committed to providing professional sales and service for its insurance customers. We have established what we consider to be an excellent reputation in our area, and are the largest multi-line insurance broker in our trading area.

3.1 Service Description

Acme Insurance provides home, automobile, and business insurance in Smalltown District. We take pride in knowing that for over 50 years we have helped our clients to find the best coverage at the right price that suits their needs and expectations. In the event of a claim, our clients know that we are there to provide help and counsel to ensure a fast, speedy claim settlement.

Like other independent brokers, we issue binders and new policies, endorsements and process renewals.

We also provide insurance services to non-clients, such as lawyers and mortgagees, to ensure our mutual clients have proper coverage and binding notes in place for the purchase of homes, businesses, and automobiles.

3.2 Competitive Comparison

Since we are brokers, (not agents such as Co-operators), we have access to a range of standard and specialty markets.

3.3 Sales Literature

We have recently produced a pamphlet titled “Insurance Partners” which stresses that a successful insurance partnership between the client, the broker, and the company is based upon a new concept.

Not only do the broker and the company take responsibility for proper protection and indemnity in the event of loss, but in the 1990’s, the client must also take his share of responsibility to insure the safety of his property by keeping it well maintained and using qualified professionals to update or change the heating, electrical, and plumbing systems in his home. We stress that multiple claims or claims arising out of poor maintenance may adversely affect his insurance.

In addition to the above, our brokerage uses a number of boilerplate letters on our computer system that are sent along with various types of policies explaining unique features or limitations in the contracts to avoid possible Errors and Omissions claims. They also encourage our clients to contact us about reviewing their coverage and promote other products and services we provide.

3.4 Fulfillment

The key to fulfilling our clients needs is provided by our principals who have over 60 years experience between them as general insurance brokers, and our staff, many of whom have been insurance brokers well over 10 years. We have one staff member with her A.I.I.C., three staff with their C.A.I.B., and two more taking C.A.I.B. courses. One staff member is completing courses to have the restriction removed from his license so he can be an alternate designated individual.

We call upon the ample resources of our insurance markets to help with any unusual situations which occur and may present a problem finding proper coverage for our client.

When we required trained inspectors for evaluating the safety of our insured’s solid fuel heating devices and installations, we sent one of our own producers for training and who now has W.E.T.T. certification.

We are proud that Acme Insurance Inc. has never had an errors and omissions loss, but to protect our clients against that possibility, we have in place Errors and Omissions Insurance through our Insurance Brokers Association in the amount of $1,000,000 (Employer’s Reinsurance).

3.5 Technology

We have been fully computerized since 1982 and both offices and some of our producer’s homes are connected to our main computer server located in Smalltown.

As of February 1996, we have entered into an agreement with our present computer vendor, Teleglobe, to update our computer system to a Pentium server, and to Release 74, which allows upload/download capability with our companies, as well as email.

We have elected to stay with the Teleglobe Tabs system since our staff is familiar with the program. It has exhibited excellent, reliable telecommunications ability. The high speed ISDN lines required for MS Windows-based communication between our branch office as well as our home offices are not available in our trading area, so at present we will not migrate to the new MS Windows-based products available from Teleglobe or Agency Manager.

3.6 Future Services

Although Stan Smith started out as a life insurance agent, the “life” part of our business represents only 1% of our sales. We are looking to strengthen this part of our operation in the future. Due to the complexity and number of life and disability products, we are presently using an outside service: Atlantic-Smith Insurance out of North Town, although two of our general insurance producers have life agent licenses.

We are in the process of setting up a substandard property market. We feel that there is a need for this service and that it can be profitable if strictly underwritten with proper controls in place.

Market Analysis Summary

Recent demographic studies in our area reveal a total year-round population of approximately 13,000, which rises in the summer to approximately 25,000. We have a relatively high number of seniors and many younger, newly-formed families dependent on government assistance living mostly in a rural, unserviced, thinly populated area. This makes it costly to service our clients. Long distance phone bills represent our second largest expense (our two offices each have their own toll free phone numbers) and the cost of visiting our insureds to do home inspections is time consuming due to the large area we service.

We are targeting seniors which have proven to be a profitable, stable market for our brokerage in spite of our present difficult economy.

We are fortunate that we have not yet had the intrusion to a large degree of mass merchandising programs like “Silver Power.” Smaller brokers have made inroads into our traditional rural business, with low cost farm markets that sell home and auto insurance. We understand that some of these markets are in a poor financial position and may cease to be a factor in the future.

4.1 Market Segmentation

Our market consists of senior citizens, lower-income young families (many of who are on social assistance) and the small, family-run business (many of which are seasonal and based on the tourist trade). There are a few industrial risks and those that are located here are branches of larger industries which obtain their insurance through large brokers in Bigtown.

Our target market is the seniors, family business, and middle income earners in our area. Statistics show that over 42% of our permanent population is above 45 years of age. The average family income is approximately $27,000 and the unemployment rate 9%.

We are cautious about encouraging business from lower income prospects since they tend to have wood heat, homes in poor repair, and many attempt to install and repair their own plumbing, wiring, and heating systems.

Another market of concern is out-of-area clients who may have been payment or claim problems to local brokers and attempt to find a distant broker to provide coverage instead of making the necessary adjustments in their own lifestyle to prevent claims.

Clients who have moved repeatedly can be difficult to obtain proper underwriting information and past claims experience on, and we feel our staff is to be commended for their ability to properly assess if a client should be placed to our standard markets or would be better served by a specialty company.

4.2 Service Business Analysis

The past few years have seen tremendous upheaval in the insurance industry. The number of players has decreased in both the broker and company communities. The automobile product has, in the mind of the public, become unaffordable, unavailable, and impossible to understand. The recession has curtailed insureds from properly maintaining their homes and automobiles, and to exacerbate the situation, many clients have turned to wood heat and started doing their own repairs and maintenance which may have increased the number and severity of claims. Insurance fraud has become a major issue for the entire insurance industry.

Our traditional close relationship with our companies has been strained. Brokers are concerned that in spite of commission reductions, quotas, contract cancellations, and refusal to write new auto business by some markets, they now may find themselves in competition with some of the traditional broker distribution companies that are setting up direct marketing facilities and branches. The banks, even though thwarted by the federal government in its last budget to retail insurance from their premises, will continue pressure on the government and now have announced they will open stand alone insurance offices to retail insurance.

The new federal government is close to adopting a new automobile contract that hopefully will make it affordable, understandable, and available to our clients. A profitable automobile product will entice the companies to aggressively seek new sales and more brokers will see companies offering contracts.

4.2.1 Main Competitors

Local independent brokers Cal Roberts, Patrick C. Johnson, Rob Champlain Strengths – alternate markets, especially small farm mutuals, that still continue to give low prices, still continue to write wood stoves, and allow discounts and underwriting terms such as table 1 rates on homeowners within 8 km of fire hall protection. Weakness – most are smaller, one-man operations that do not have the backup or finances to aggressively impact the marketplace.

Agents (such as Co-operators) Strengths – Large advertising budget and competitively priced products. Their commercial is difficult to compete against in some cases because they seem to not have the same restrictions on underwriting as our markets. Also they have large capacity to write certain risks. Weakness- one small operation that does not have the same hours as our offices. Staff, because of salary, do not appear to be very knowledgeable or aggressive.

Mass Markets Strengths – large advertising budget and very competitive prices. Weakness – not local and largely unknown to our clients at the present time.

Our own Companies Strengths – already known to our clients; will be competitively priced. Weakness – an unknown quantity to our insureds. Also, if their people skills are similar to what they now exhibit, they will have great difficulty empathizing with the client and selling the client what he needs, not what they think he needs.

Mass merchandise programs heavily advertised over the radio such as “Gray Power” Strengths – price. Weakness – a still untried, unknown quantity.

Group Plans – teachers, public employees Strength – group pricing. Weakness – very little obviously, since we insure very few of the professions.

4.2.2 Competition and Buying Patterns

The main volume of income for our brokerage is generated by automobile premiums because they are relatively higher priced to insure than property, and because automobile insurance is mandatory in the region.

As stated previously, our success is dependent on our staff and our companies convincing our clients and prospective clients that price, although important, is not the only criteria for the purchase of insurance. Our advertising stresses that we have two offices, open six days a week with after-hours support and we have been an active, concerned, community involved, local business since 1938.

Still, price is very important and we must work with our markets to ensure that our insurance products are available and affordable to a large part of the market. It is the broker’s job to ensure the client understands what he is buying, and if circumstances dictate a lower-priced product, we must make our insured aware of the trade-off in coverage versus price.

4.2.3 Business Participants

Cal Roberts Insurance Markets – Royal, Dominion of Canada Patrick C. Johnson Markets – General Accident, Canadian Surety Rob Champlain Markets – Farmer’s Mutual, National Frontier Co-Operators Silver Power Markets – Trafalger Con-struct Direct

4.2.4 Distributing a Service

Our trading area is rural. Premiums are relatively low and therefore not subject to large brokerages or specialty direct writers mounting aggressive advertising campaigns to bring in business. There are few group plans providing insurance coverage with the exception of our teachers. Smalltown has two independent brokers and a Co-Operators agent, Nexttown has two independent brokers, and Southtown has one. We have just started to see some move by locals to “Silver Power” and other specialty retailers who advertise on radio and television. The banks are still a future unknown.

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How to Write a Business Plan: Your Step-by-Step Guide

So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.

Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.

Build your dream business with the help of a high-paying job—browse open jobs on The Muse »

What is a business plan, and when do you need one?

According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.

“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”

Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.

Different types of business plans

The four main types of business plans are:

Startup Business Plans

Internal business plans, strategic business plans, one-page business plans.

Let's break down each one:

If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.

Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.

Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.

Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.

As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .

Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.

Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).

A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.

How to create a business plan in 7 steps

Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:

1. Conduct your research

Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?

2. Define your purpose for the business plan

The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.

3. Write your company description

Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

4. Explain and show how the company will make money

A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.

For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.

5. Outline your marketing strategy

How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.

6. Explain how you’ll spend your funding

What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.

7. Include supporting documents

Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”

A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.

“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Insurance Agency Business Plan

Start your own insurance agency business plan

Quaestor Services

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Quaestor Services is in the process of being formed as a sole proprietorship owned and operated by Sheila Claflin. This plan is written as a guide for financing, start-up and management of this new business and will also serve as the basis for measurement. The following is a summary of the main points of this plan.

• The objectives of Quaestor are to generate a profit, grow at a challenging and manageable rate, and to be a good citizen in the community.
• The mission of Quaestor is to provide products and services with high quality, protection and value pricing.
• The keys to success for Quaestor are variety of business services and products, personal contact, timely and accurate service, development of one-to-one relationships, and a reputation of honesty and integrity. 
• The primary products offered will be from Whelnoan Insurance Company, and the added value to small businesses will be the accounting and financial services offered.
• The local market for this business is wide open. Whelnoan Insurance Company has captured 23% of the market share and is considered the second largest insurance company in Plainstate. 
• In the first year of operation, a customer base is being established. Over 85% of the new and established insurance business will renew each year creating compounding growth in sales of over 200% with limited increase in operational expense.

In conclusion, as shown in the highlights chart below, this plan projects rapid growth over the next three years with a profit forecasted in the second year of operation and continuing into future years of operation. Implementing this plan, will ensure that Quaestor Services becomes a profitable venture.

1.1 Objectives

The main objectives of Quaestor Services are:

• Profit – to create enough prosperity for the owner and employees to have a secure and comfortable lifestyle.
• Growth – to grow the business at a rate that is both challenging and manageable.
• Citizenship – to be a social asset to the community and contribute to others who are less fortunate.

1.2 Mission

Quaestor Services is dedicated to providing insurance products and business services that provide high quality, protection, and value pricing. We wish to establish a successful partnership with our clients that respects their interests and goals.

Success will be measured by our clients choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and expertise.  

1.3 Keys to Success

The keys to the success for Quaestor Services are:

• A wide variety of business services and insurance products that are affordable, available and understandable.
• Personal contact and service that meets or exceeds the expectations of our clients.
• Services and products that are delivered with accuracy and timeliness.
• Relationships with our clients that fosters renewal business.
• A reputation in the community for it’s honesty and integrity.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Quaestor Services is a start-up company located in Smileyville, Plainstate, a suburb of Niceburg, providing both accounting and full-charge bookkeeping services and insurance and retirement products to individuals, families, and small businesses.

2.1 Company Ownership

Quaestor Services  is a sole proprietorship, owned by Sheila Claflin. Born and raised in the Pacific Northwest with Native American Indian heritage, Sheila was relocated to Plainstate in 1994 by her employer. 

She has over 30 years of experience in Finance, Accounting, Management, and Consulting and recently received her Plainstate insurance agent license for Life, Health, Property and Casualty insurance.

In the near future she intends to receive her Series 6 Securities license and take H & R Block Income Tax Course.

2.2 Start-up Summary

Quaestor Services start-up costs include:

• Marketing/Lead Services: marketing and lead generation services to establish client base
• Website Development: professionally developed business website on the Internet
• Logo: professionally developed business logo for business recognition in the market place
• Stationary: the printing of letterhead and envelopes with the company logo
• Business Cards: the printing of business cards with company logo
• Brochures: development and printing of brochures for marketing the business
• Cell Phone and Pager: business cell phone and pager for communication with the clients at all times
• Office Supplies: supplies necessary to set up an office
• Training/Licensing: costs associated with the three state licenses required for insurance business
• Business Associations: membership into several business associations such as Chamber of Commerce

Quaestor Services long-term assets include:

• Laptop Computer: used in meetings with clients for printing insurance quotes and on-line applications
• PC Computer/Monitor: used in office for accounting services and record of business transactions
• Printer/Copier/Scanner: used in office for business transactions       

Start-up costs come to $30,000 of which $15,000 is being financed by a direct owner investment. In the first six months of operation $15,000 financing is being sought after for the start-up costs. In mid-Year 1 an additional $10,000 in financing will be required to ensure business operations, marketing and stability during the first year of operation.

Quaestor Services provides accounting and full-charge bookkeeping services, insurance and retirement products to individuals, families, and small businesses.

As a representative of Whelnoan Insurance Company the following product and services are offered:

• Personal Lines – auto, renters, home, motorcycle, boat/yacht, snowmobile, jet ski
• Commercial Lines – businesses, workers compensation, surety bonds
• Life & Disability Products – term, whole, universal and variable life, long-term care, disability
• Retirement Products – fixed, equity indexed, and variable annuities, mutual funds
• Retirement Plans – IRA, Roth IRA, pension plans, SEP plans, SIMPLE plans
• Life Planning Concepts – mortgage protector, business continuation, buy/sell agreements
• Value Added Products

In the future we intend to offer the following independent products and services:

• Health Insurance
• Pet Care Insurance

Accounting and Full-Charge Bookkeeping Services are available at either the client’s location or in our offices on a regular, permanent basis with a schedule that accommodates the client’s needs. Rates are based on the needs of the business. These services include:

• Accounts Payable
• Accounts Receivable
• Credit/Collection
• Reconciliations
• General Ledger Maintenance
• Financial Statements

In the future we intend to offer the following accounting service:

• Income Tax Preparation

Market Analysis Summary how to do a market analysis for your business plan.">

The market area for Quaestor Services will be focused on three counties, Pleasant, Niceburg and Contented, in Plainstate. These counties are experiencing a combined average growth in population over the 2000 census of 6.45%.

As of 2004, the Whelnoan Insurance Company is the second largest insurance company in Plainstate with 23% of the market share. The overall market for Quaestor is wide open. This business plan has identified over 1.3 million  individuals and business as potential clients in the market area.

4.1 Market Segmentation

Quaestor Services has targeted the following market segments:

The available market share of 77% represents the market that Whelnoan Insurance has not captured at this time. Although,the entire state is an available marketing area, the tri-county area will be the focus marketing area at this time. The total population of the tri-county area available for marketing is 29% of the total available population in Plainstate. 

The first and most important market segment is population broken down by age groups. This can be used for determining the market for personal lines of insurance such as auto and various recreational vehicles, life and life planning products.

Note that the population of 15 to 24 year olds has been separated from the available population as a market segment in itself for determining the possibility of high risk auto insurance policies.

The second market segment is housing units broken down by owner occupied and renters. This can be used for determining the market for personal lines of insurance such as home, townhouses, condominium, renters and mortgage protection.

The third market segment is small businesses with less than 20 employees. This can be used for determining the market for accounting and bookkeeping services and commercial lines of insurance including property and casualty, retirement and workers compensation.

Strategy and Implementation Summary

• Emphasize value instead of price . Quaestor is dedicated to working closely with each client and educating them on the importance of value over price.
• Build long term relationships . Quaestor is dedicated to establishing a successful partnership with each client, respecting their interests and goals by cultivating a long term relationship to enhance client retention.
• Focus on increasing market share . Quaestor will focus on personal and business clients that have been identified in the targeted markets.

5.1 Competitive Edge

Quaestor’s competitive edge is our positioning as strategic ally with our clients, who are clients more than customers. By building a business based on long-standing relationships with satisfied clients, we simultaneously build defenses against competition. The longer the relationship stands, the more we help our clients understand what we offer them and why they need it.

5.2 Marketing Strategy

The marketing strategy is the core of Quaestor’s main strategy:

• Develop specific programs for each target market segment

5.3 Sales Strategy

Quaestor’s sales strategy will be based on systematic person-to-person contacts through referrals, direct mail, telemarketing and the Internet. A list of potential prospects has already been compiled and will serve as a launching pad for marketing the products and services.

5.3.1 Sales Forecast

The important elements of the sales forecasts are summarized on three line items, Accounting Services, Insurance Sales, and Miscellaneous Revenue. The summary of the initial sales forecast indicates a first year revenue of $39,500 increasing to over $108,310 by the end of the second year, then $122,110 by the end of the third year. It should be noted that although sales triple in the second year, all revenue has been forecasted very conservatively for the three year forecast. Forecasted sales increases are overstated by the Whelnoan Insurance subsidies or Miscellaneous sales. Actual sales growth for the second year is 160% due to adding a producer for continued sales growth and exponential growth of insurance renewals. The third year of sales reflects an actual growth of 76% due mostly to the increase in insurance renewals. Each element will be discussed separately and in its entirety below: 

Accounting Services – it has been determined in order to be conservative for this forecast, that the average accounting client requires services at approximately $500 a month, or 25 hours (x) $20 hour. Obviously this can vary depending on the needs of the client, but for forecasting purposes this is the standard used in determining the monthly revenue. In addition, it is assumed that once our services are sold to the accounting client, they will continue to generate a monthly revenue until replaced. Income tax preparation which will yield a substantial increase in revenue as a future service, but is not considered in this forecast. The illustration below, shows two clients are forecasted for the second year and three clients are forecasted for the third year. Accounting clients can sometimes require substantial time at first, until the clients’ needs are defined and set up. Limited clients are being forecasted due to the time required growing the client base for insurance.

Insurance Sales – are comprised of two categories, 1) insurance-new sales and 2) insurance-renewals. The insurance products used to forecast new sales are, auto and high risk auto (renews every six months), property structures such as homes, townhouses, condominiums, renters and landlord insurance, commercial, life and all other types of recreation vehicle insurance, (renews annually).  It should be noted that in order to be conservative, not all insurance products that are offered were forecast, such as health, retirement products and plans. Whelnoan Insurance Company District Office supplied the necessary documentation needed for the formulation of the insurance sales and renewals. Sales are based on actual results (averaged) created for the first three years of a new Whelnoan Insurance agency. All numbers have been reviewed and approved by them before the forecast was entered into this business plan.  

What makes insurance sales different from other sales are the renewals. In most cases, without an increase in monthly production, the monthly income will almost double due to renewals. It has been determined by Whelnoan Insurance that customer loyalty in the first year is 87%, second year is 85% and third year is 89%. Other than auto, which renews every six months, all other insurance products renew on an annual basis. Because of renewals, it is possible to double sales revenue without increasing production costs. The following is the monthly forecast:

Miscellaneous – the amounts forecasted in Miscellaneous are Whelnoan Insurance subsidies offered at pivotal times throughout the first two years to financially support the insurance agency during the development stage. The subsidies are broken down into four categories, and require that milestone production levels be achieved before the subsidy is made available, 1) commissions on new sales 2) marketing leads, 3) office space, and 4) staff. At the end of two full years of operations as a career agent, subsidies are no longer available. The total subsidies forecasted in the first year is $13,875, in the second year $41,700, and $4,800 in third year, for a total of $60,375. 

5.4 Milestones

The table below lists important program milestones, with dates and managers in charge. The milestone schedule indicates Quaestor’s emphasis on planning for implementation and the measurement of these activities. In addition, each milestone is important to achieving the financial forecast used in this business plan. The following is a brief description of each milestone:

• 12/01/04-01/31/05-Business Financing – obtain the very important start-up financing necessary for the first year of operation.
• 01/01/05-03/31/05-Career Agent – the Whelnoan Career Agent Program starts when a new agent has completed their training, received the required insurance licenses and in the last 90 days sold 30 policies including three life insurance policies. 
• 01/01/05-02/28/05-Accounting Services (1st Client) – obtain the first monthly client for accounting services.
• 03/01/05-06/30/05-Accounting Services (2nd Client) – obtain the second monthly client for accounting services.
• 04/01/05-09/30/05 -Career Agent (6 months)  – the first milestone in the Whelnoan Career Agent Program. A Career Agent receives $1,500/monthly for the first six months. At the end of six months, a Career Agent’s production is checked for the number of policies issued-and-paid to determine subsidy level. Required level per financial forecast is 80 property and casualty policies and eight life policies which allows a subsidy match of commission dollar for dollar on new business commissions up to $2,000/month and a lead subsidy of $100/month.
• 05/01/05-06/30/05-Business Financing – obtain additional financing to ensure business operations, marketing and stability during the first year of operation.
• 11/01/05-12/31/05-Hire Agent – hire and train new agent for a start date of 1/01/06.
• 04/01/05-03/31/06 -Career Agent (12 months) – the second milestone in the Whelnoan Career Agent Program. At the end of twelve months, a Career Agent’s production is checked for the number of policies issued-and-paid to determine a new subsidy level. Required level per financial forecast is 180 property and casualty policies and 18 life policies which allows an additional subsidy for staff at $1,500/month and office space of $750/month.

Whelnoan Insurance Subsidies are available for 24 months only or 4/1/05-03/31/07

• 04/01/05-03/31/07 -Run to Daylight (24 months) – the third milestone in the Whelnoan Career Agent Program. At the end of twenty-four months, a Career Agent’s production is checked for the number of policies in force to determine waiver of one third of the subsidies paid to the agent. In order to be eligible, an agent must have 400 property and casualty policies and 40 life policies in force.
• 04/01/05-03/31/08 -Run to Daylight (36 months) – the fourth milestone in the Whelnoan Career Agent Program. At the end of thirty-six months, a Career Agent’s production is checked for the number of policies in force to determine waiver of second third of the subsidies paid to the agent. In order to be eligible, an agent must have 540 property and casualty policies and 54 life policies in force.
• 04/01/05-03/31/09 -Run to Daylight (48 months) – the fifth milestone in the Whelnoan Career Agent Program. At the end of forty-eight months, a Career Agent’s production is checked for the number of policies in force to determine waiver of last third of the subsidies paid to the agent. In order to be eligible, an agent must have 660 property and casualty policies and 66 life policies in force.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The management philosophy of Quaestor Services is based on respect for every client, and individual responsibility. For the first year the only employee will be the owner, Sheila Claflin. In January of 2006 the financial forecast supports the hiring of an insurance agent to help increase the growth of the business. 

Quaestor’s intention is to hire only those who demonstrate the qualities necessary for working in a professional environment, and the willingness to move forward in continuing education. We will be hiring the ultimate “people persons” to provide world class service.

6.1 Personnel Plan

The Personnel Plan reflects the staffing levels required to create, and establish the customer base needed to achieve the revenues projected and reach profitability.

All insurance sales and business service personnel salaries are considered a direct cost of sales, and are listed as such in the financials .

Financial Plan investor-ready personnel plan .">

Quaestor Services’ financial plan is based on obtaining a loan by January of 2005 of $15,000 to cover the start-up expenses. In July of 2005 an additional $10,000 in financing will be required to ensure business operations, marketing and stability during the first year of operation. For financial forecasting the loan is a seven year loan at an interest rate of 9.09%. Quaestor will achieve profitability in the second year.

The fiscal year is a calendar year, January through December.

7.1 Start-up Funding

Start-up costs come to $30,000 of which $15,000 is being financed by a direct owner investment. Before the first six months of operation, $15,000 financing is being sought for the start-up costs. In July of 2005 an additional $10,000 in financing will be required to ensure business operations, marketing and stability during the first year of operation.

7.2 Important Assumptions

The key underlying assumptions of Quaestor financial plan shown in the following general assumption table are:

• We assume access to financing of $30,000 to support our financial plan.
• We assume our financial progress is based on a very conservative sales forecast supported by data received and reviewed by Whelnoan Insurance.
• We assume that all sales milestones have been achieved.

7.3 Break-even Analysis

The following table and chart show our Break-even Analysis. The first year due to start-up costs and expenses will not be included in the break-even analysis.

7.4 Projected Profit and Loss

Based on the realistic sales projections and efficient cost control measures in place, Quaestor will achieve profitability in the second year of operation. Monthly profitability is first achieved in November 2005, but due to developing a customer base, the first months of operations reflect a loss.

In the second year of operation, sales increased $68,810 or 174%, resulting in a net profit. Significant changes in the second year are the hiring of an agent in January 2006, resulting in additional costs to the direct cost of sales of $34,500 and the set-up of an office outside of the owner’s home and Whelnoan Insurance District 15 office, resulting in additional operating costs of $7,120.

7.5 Projected Cash Flow

Due the fact that Quaestor is a new start-up company, the cash flow for FY2005 is somewhat exaggerated by the instant influx of new capital. Subsequent years however show a healthy growth in cash flow, mainly due to the 84-month repayment of the start-up loan and increased sales.

7.6 Projected Balance Sheet

The table below presents the balance sheet for Quaestor Services. This table reflects a positive cash position throughout the period of this financial plan. The negative net worth is created in the first year due to the start-up costs showing as a negative retained earnings. As the balance sheet shows, Quaestor will not have any difficulty meeting their debt obligations as long as the conservative revenue projections are met.

7.7 Business Ratios

The table below presents common business ratios as a reference. Industry Profile comparisons are for Standard Industrial Classification code 6411.0000, Insurance Agents, Brokers and Service as the majority of our revenue comes from insurance sales. However, since the combined business of accounting/bookkeeping services and insurance sales does not fall underneath any predefined Industry dataset, the Industry ratios are not wholly accurate nor representative for Quaestor Services.

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Best small business insurance companies for July 2024

Small business insurance coverage, tailored to the needs of the company it covers, can take that burden off a business owners’ shoulders and protect them from financial risk due to theft, fire or lawsuits.

There are many companies offering small business insurance in the U.S. Here, we review some of the top providers.

Our picks for small business insurance

Best for ease of use: next insurance.

Next Insurance

• User-friendly web experience.
• Coverage packages for a wide range of business types.
• AM Best rating of A- is lower than some of the others in our review.
• Currently not available through agents.

NEXT Insurance offers online quotes for coverages including BOP, commercial auto, commercial property, cyber insurance, errors and omissions (E&O), general liability and workers’ compensation. The company was not included in J.D. Power’s 2023 Small Business Insurance Satisfaction rankings. It has an A- rating from AM Best.

As an insurtech company, NEXT invests heavily in technology to improve underwriting, claims handling, customer service and other operations and features a user-friendly web experience. It also offers coverage packages tailored to the needs of small businesses ranging from contractors to retail to fitness providers and even Amazon sellers. Customers can download certificates of insurance through the website or the company’s app.

NEXT is not sold through agents. However, the company recently announced a partnership with Allstate that seems to hint at possible availability through that company’s agent network in the near future.

Best for companies that do business internationally: Chubb

• Available package of coverage for companies doing business overseas.
• Highest possible rating (A++) from AM Best.
• Lowest J.D. Power ranking of companies in our review.

As one of the largest insurers in the United States, Chubb notes that it offers “tailored policies for hundreds of professions.” The company offers a variety of insurance products for small businesses, including BOP, cyber insurance, general liability, umbrella and workers’ compensation. Chubb also offers a foreign package for companies that do business outside of the U.S.

The company provides online quotes, along with useful information to help business owners think through their coverage needs. Customers can report a claim online as well. The company is also supported by a network of agents.

Best for loss control services: Cincinnati

• Offers personalized loss control services to help businesses minimize risk.
• High ranking by J.D. Power.
• Does not offer quotes online.

Cincinnati offers a wide range of business coverages, including business auto, business liability, business property, cyber risk, inland marine, professional liability, umbrella and workers’ compensation. The company also offers a range of personalized loss control services to help businesses minimize risks and avoid claims.

Cincinnati does not offer quotes online (though it does offer compelling reasons why you should work with an agent when buying insurance). And while the company may not be as recognizable as some larger brands, it does offer coverage in 46 states and ranked third out of 13 companies in J.D. Power’s most recent small business insurance customer satisfaction rankings.

Best for building and construction: Farmers

• Above-average rating by J.D. Power.
• Coverage package for contractors.
• AM Best rating of A is lower than others in our review.

Farmers offers business coverages such as business auto, crime, liability, property, umbrella and workers’ compensation. Farmers offers a coverage package tailored to the needs of builders, plumbers, electricians, landscapers and other contractors.

Get a quote either online, by phone or through a local agent. Farmers has an A rating from AM Best and was ranked No. 4 on the business insurer list by J.D. Power.

Best for customer satisfaction: Nationwide

• No. 1 ranking by J.D. Power.
• Wide range of coverage types for businesses.
• AM Best rating of A is lower than most in our review.

Another well-known insurance brand, Nationwide offers a wide range of coverage types for businesses. These include BOP, builder’s risk, business income, business liability, commercial property, crime, cyber liability, errors and omissions (E&O), employment practices liability insurance (EPLI), equipment breakdown, inland marine and workers’ compensation. Customers can get a quote online, by phone or through a local agent.

Nationwide was first out of the 13 companies ranked in the 2023 J.D. Power U.S. Small Commercial Insurance study. J.D. Power noted that even though business insurance premiums are increasing, insurers that proactively communicate with customers and work with them to find ways to minimize their insurance costs tend to see an increase in customer satisfaction.

Best for commercial auto insurance: Progressive

• Specialized coverage for commercial vehicles, from business autos to heavy trucks and trailers.
• Quotes available online or through an agent.
• Not rated by J.D. Power.

Progressive claims to be the No. 1 commercial auto insurer in the U.S., insuring more than 1.9 million vehicles. The company offers specialized coverage for business autos, contractors, heavy trucks and trailers.

Besides commercial auto, Progressive offers BOP, cyber insurance, general liability, group health, professional liability and workers’ compensation coverages. Its website offers online quotes and includes articles and other resources to help customers determine their coverage needs. Progressive also sells through a large network of independent insurance agents. Claims can be reported online or by phone.

Progressive has an A+ rating from AM Best but was not included in J.D. Power’s most recent rankings of small business insurers.

Best for coverage options: State Farm

• Coverage for a wide array of businesses.
• Cannot report most small business claims online.
• Does not offer online quotes for business insurance.

The largest property and casualty insurer in the world, State Farm offers insurance for more than 300 professions. Everyone from accountants to window treatment store owners can get the coverage they need from this financial services giant.

State Farm offers BOP, builder’s risk, commercial auto, commercial umbrella, farm and ranch insurance, inland marine, group life, professional liability, workers’ compensation and other coverages.

State Farm has a B rating from AM Best, and came in second out of 13 insurers in J.D. Power’s 2023 ratings of small business insurance companies. State Farm runs most of its business insurance customer service through its local agents who provide quotes and are the first point of contact when a customer reports a claim.

Methodology

We reviewed several leading providers of small business insurance, evaluating those companies on their coverages offered, independent ratings and rankings and overall ease of use (including a choice of how to get a quote). Our picks are based on each company’s standout features. All websites were accessed April 24-26, 2024.

Note about third-party sources:

• AM Best is a leading global provider of analytics and ratings specializing in the insurance industry. Its ratings indicate a company’s financial strength and ability to pay claims.
• J.D. Power provides insights into consumers’ interactions with brands in various industries, including insurance. Its 2023 small business insurance customer satisfaction rankings were based on a scale of 1,000 possible points.

How much does small business insurance cost?

The cost of small business insurance varies based on the insurer, the business size and industry, number of employees and other factors.

A recent study by Insureon, an online insurance agent, found that its customers pay an average of $684 per year for BOP, $1,764 for commercial auto and $540 for workers’ compensation coverage.

Who is small business insurance for?

Small business insurance can help reduce a company’s financial risk due to theft, property damage caused by fires, storms or other catastrophes and lawsuits. There are numerous ways to define “small business.” The Small Business Administration , for example, offers tables that define small businesses in various industries based on their number of employees or amount of revenue.

What are the different types of small business insurance?

Small business insurers typically offer a range of coverage options. These can be “mixed and matched” to the needs of a specific small business, ensuring the company has exactly the insurance it needs (and isn’t paying for insurance it doesn’t need).

The most common types of small business insurance

General liability (gl).

This coverage comes into play if a business causes harm (injury or property damage) to a customer or the general public.

Property insurance

This applies if any business property is damaged by catastrophes such as fires and storms, or is stolen and not recovered.

Business interruption

This helps reimburse lost income if a business is forced to shut down operations due to a covered incident.

Business owners policy (BOP)

While GL, property and business interruption may be purchased separately, it’s common to buy them packaged in a BOP. As a package deal, a BOP usually costs less than buying separately. Plus, the business owner has only one policy to deal with.

Additional types of small business insurance

A business may need to consider purchasing additional insurance, depending on its needs.

Commercial auto insurance

While similar in many ways to a personal auto policy, commercial auto is tailored to the needs of a business that owns, leases or rents vehicles and has employee drivers.

Commercial umbrella insurance

This is an extra layer of liability coverage that kicks in if a claim exceeds a policy’s standard liability limits.

Cybersecurity insurance

Helps reimburse costs a business may incur following a cyberattack, including recovering and replacing lost/stolen data, customer notification and legal counsel.

Employment practices liability insurance (EPLI)

This coverage applies if current or former employees sue a business for issues such as discrimination, wrongful termination or harassment.

Inland marine insurance

This helps reimburse a business if property shipped overland by truck, train or other transport is damaged or stolen.

Professional liability insurance

Typically for professional services such as accountants, doctors and lawyers, this coverage applies if clients sue for negligence. Some companies refer to this as errors and omissions (E&O) insurance.

Workers’ compensation

This pays for medical expenses, lost wages and rehabilitation expenses if an employee is injured or becomes ill on the job.

How much insurance does a small business need?

No two businesses are exactly alike, and no two businesses’ insurance needs are the same either. The amount of coverage a small business needs varies depending on its size, number of employees, assets, type of business and other factors.

Most small businesses typically need GL, property insurance and business interruption coverage, which they can purchase as a BOP. Some coverages, such as workers’ compensation or commercial auto, may be required by law for certain businesses. Other coverages, such as professional liability, are advised for businesses in industries prone to customer litigation.

How to get small business insurance

As with other types of insurance, small business insurance company websites are often loaded with information and tools to help a business owner decide what coverages they need. Many sites even offer “get a quote” functionality. This can be extremely useful to a business owner wanting to get an idea of how much insurance will cost.

However, we recommend buying insurance through an agent. Insurance agents are licensed professionals who are trained to understand their clients’ financial risks. They can take time to understand a small business’ insurance needs and get them a policy that provides adequate financial protection. Independent insurance agents typically represent multiple companies, so they can shop around to help you find coverage that works for your budget.

The AP Buyline roundup

Many small business insurance companies offer coverage tailored to the needs of small business owners, protecting against fire, theft, lawsuits and other risks. Business owners owe it to themselves to have that protection. An insurance agent can help match a small business to the right coverage.

Frequently asked questions (FAQ)

How do i know if i need small business insurance.

Laws in many states and municipalities require businesses to have coverages such as liability, workers’ compensation and commercial auto. Small business insurance limits a company’s financial risk. An insurance agent can help you determine your coverage needs and make sure you buy the right policy or policies.

What does business insurance exclude?

Virtually every type of insurance policy has exclusions — specific acts or incidents the insurer doesn’t cover. Some typical exclusions include:

• Damage or destruction related to large catastrophes such as watershed flooding and earthquakes. Note that coverage endorsements or separate policies may be available to protect against these risks.
• Damage caused by improper or inadequate maintenance.
• Losses resulting from illegal business activity.
• Intentional damage by the business.

Your insurance policy spells out any exclusions. Be sure you understand what yours does and doesn’t cover and ask your agent for help.

Does a business auto policy cover personal use of a company vehicle?

A business auto policy typically provides coverage for the personal use of a company vehicle, provided that the employee is listed on the policy as a permitted driver. For example, a sales representative can use her company car to pick up her daughter from softball practice or to run errands on the weekends.

Check your business auto policy to understand exactly how your coverage works. Again, your agent can help.

What’s the difference between general liability and professional liability insurance?

General liability insurance provides coverage for any harm your business might cause in the regular course of operations, including injuries to customers or property damage. Meanwhile, professional liability insurance protects certain service providers, such as doctors, attorneys, accountants and others, from legal damages caused by their professional mistakes.