The insurance business can hardly be called stable and it is almost impossible to predict its profitability or unprofitability. In this area, there are regularly both recessions and sharp jumps, and economic instability is to blame.
However, insurance has long passed the stage of formation and is currently for beginning entrepreneurs. This article contains a comprehensive answer to a question that interests many aspiring entrepreneurs: “How to open an insurance company?”
Insurance is conventionally divided into several large-scale industries, having studied them in more detail, you need to decide what exactly you will do.
Insurance industries
- Business risks (losses, loss of income);
- Responsibility (responsibilities).
- Personal (person’s health, life or ability to work).
- Social (income level).
- Property (human material assets - cars, crops, animals, houses, etc.).
Insurance is the contribution by a legal entity or individual of funds to a company, which, in the event of a certain event (insured event), undertakes to pay him compensation.
And if just a few years ago insurance was perceived by people accustomed to hoping for chance as a useless, incomprehensible procedure, Today, many have already appreciated the benefits of this activity and have a normal attitude towards this procedure.
And more enterprising individuals make money from this, but can everyone open their own insurance company?
Procedure for opening your own insurance company
To open your own insurance company, you will need to carefully consider what exactly you will insure. Then you will need to complete several steps:
- and obtain a license;
- rent and equip office space;
- dial
- attract clients.
We will look at each stage in more detail below.
Registration of activities
To carry out insurance activities, you can choose almost any legal form - OJSC, CJSC, LLC. The easiest to register is the last type, namely, for registration of which you will need to collect a certain package of documents.
Before submitting an application for registration, it is necessary to decide on the name of the company, which must contain In addition to the name of the organization, the circle of founders and the director must already be determined.
You will need to submit it to the tax office copies of passports with originals of all founders and the director, TIN and registration of the latter, the Criminal Code, documents about the address of the company, provide the name of the organization in full and abbreviated form, the amount of the authorized capital.
During registration you will need to indicate the type of activity– insurance with a detailed listing of all its types that you plan to deal with.
There is no need to indicate anything other than it, unless the additional activity is related to the main one, such as assessment or examination.
Afterwards you will need to obtain a license. The company must meet the following requirements to receive it:
1. Availability of the required amount of authorized capital:
- from 25,000 minimum wage when implementing types of insurance other than life insurance;
- if life insurance is also expected, then from 35,000 minimum wage;
- from 50,000 minimum wage only when carrying out reinsurance.
2. The ratio between the insurance premium and own funds is observed:
- The maximum liability taken for an individual risk does not exceed 1/10 of the organization’s total assets.
- Registration on the territory of the Russian Federation.
What documents will be required?
To obtain a license, you will need to contact the Insurance Supervision Department of the Ministry of Finance of the Russian Federation and provide them with the following documents:
- insurance documents (business plan, tariffs and insurance rules),
- document confirming payment for the management company;
- registration document;
- if the founder contributes property to the management company’s account, you will need to provide a certificate of its delivery and acceptance;
- information about the manager;
- balance sheet and calculation of the ratio of assets and liabilities;
- application (indicating the name, address, zip code, contacts of the company).
Search for office space
For the office you will need to find an area size from 200 sq. m. if you wish, you can make it larger (up to 400).
The city center is considered the best place for traffic, however, the high cost of renting premises there forces one to look for an alternative.
These could be busy streets, the first floors of business centers, the main thing is that the building is not in a residential area. Finding your company should be easy It is mandatory to have a shuttle or metro stop nearby.
Let it be an old building, the main thing is that it is clearly visible from the road and people passing by in buses and cars can notice a large sign with the name of your insurance company.
A company’s office is its face; you shouldn’t skimp on renovations; the room should be clean, light, modern, and spacious. It is necessary to equip a utility room, a manager’s office, a customer service room, and an area for agents inside.
The presence of coolers and air conditioners in the hall will give the office solidity. Various posters, pamphlets with information about rates, a book of complaints and suggestions should also be kept in the premises.
You will need to purchase office furniture, cabinets, a safe, shelving, office equipment, stationery, consumables, stamps, etc.
Recruitment
Selecting insurance agents It’s worth deciding whether you want to train them yourself or not. In the first case, it is easier to find willing people, but you will have to spend money on training, and you will be able to check the effectiveness of such an employee only after training.
In any case, it is necessary to conclude an agreement with the students obliging them to work for you after completing the courses for a certain time so that the money is not wasted.
The second option involves searching for specialists, who can be quite difficult to find. Really good agents will have to be lured away from competitors by offering them more flexible hours and larger percentages of sales.
Minimum staff of an insurance company
- director;
- about 20 agents at the initial stage (the more there are, the higher the profit);
- cleaning woman;
- teacher (if you plan to train candidates).
Attracting clients
Printing leaflets, hanging banners, advertising on television, radio - second step.
Third and main– attracting clients by agents. Suppose you are in the business of car insurance, which means you need to look for clients in car dealerships, car service centers, parking lots, etc.
Most of the clients are acquired in this “live” way, and the more convincing the agent’s speech sounds, the more there will be those who want to insure their property in your company.
Insurance company business plan
- Charter from 20 million rubles.
- from 30,000 rubles.
- Rent from 100,000 rubles.
- Repair, arrangement, purchase of equipment and furniture from 300,000 rubles.
- from 250,000 rubles.
- Advertising and website from 80,000 rubles.
At the initial stage, you will need to invest from 20,760,000 rubles.
Insurance company profitability
Despite the large initial investment The insurance business is considered quite a profitable business. With proper organization and selection of qualified employees, an insurance company can pay for itself in less than four years, provided that 10% of the insurance premium remains in the budget.
Problems encountered in the process of opening and operating an insurance company
There are several main, frequently encountered difficulties in creating an insurance company.
1. Lack of start-up capital
This problem can be solved by searching for investors. Before starting this business, you need to create a successful one that could interest a potential investor and set you apart from the crowd of other entrepreneurs.
And we shouldn’t forget about the favorable conditions for the investor; they should be a little more pleasant and profitable for him than with other similar companies.
2. Shortage of quality personnel
Difficulties may also arise at the recruitment stage. There may be many people willing, but those who can really attract customers and increase the company’s income are difficult to find. The solution is to search among friends, lure away from competitors, and motivate agents.
3. The likelihood that many insured events will occur simultaneously
It is impossible to predict this moment and we can only hope, that this won't happen. But it is necessary to take this fact into account.
Start your own business in the insurance industry quite difficult, but possible, having the necessary amount of money or having investors.
To open an insurance company, you will need to obtain a license, and then begin to look for employees, paying special attention to their ability to persuade and interest. The success of a business undoubtedly depends on the skill of the manager, but in the insurance business agents also play an important role.
Don’t know how to open an insurance company in Russia on your own and what are the features of doing business in the Russian Federation? Watch the following detailed video:
Opening your own insurance company is one of the most labor-intensive and expensive types of business. To open a full-fledged company, you need at least 20 million rubles, a general director with a higher specialized education and experience in the insurance industry. In addition, obtaining a license takes about a year. Opening an insurance company is associated with great risks, since the level of competition in the insurance market is very high.
Insurance Business Basics
An insurance company is one of the subjects of the insurance market that provides services for concluding insurance contracts and organizing the process of insurance payments.
The main types of services that such companies can provide:
- Personal – life and health insurance, tourism, accidents.
- Property insurance – cars, housing, jewelry.
- Liability Insurance – compensation for discrepancies between promises and results in the production of goods.
- Insurance of specific and financial risks – political risks, failure to fulfill financial obligations.
The more services a company provides, the higher its income.
What types of insurance are most profitable?
When compiling a list of basic services, it is necessary to focus on the demand for certain services. The most popular:
- OSAGO services.
- CASCO services.
- Health insurance.
- Life insurance.
- Real estate insurance.
To provide OSAGO and CASCO services, you must obtain a license from the Federal Service for Financial Markets. The license cost is about 120,000 rubles.
Enterprise registration
Suppose you already have authorized capital and you are going to open your own insurance company. In this case, you will need a number of documents:
- You must register as a legal entity. In this case, you can choose the following forms of ownership: OJSC, LLC.
- Draw up and approve the organization’s charter, which specifies all types of services provided: types of insurance, assessment and examination in the field of insurance.
- Documentary confirmation of the authorized capital.
- License issued by the Ministry of Finance. To obtain a license, you must provide the following package of documents: ; insurance documents (rules developed by you, estimated tariffs, actuarial calculations); business plan ().
- Documents of the General Director: copy of passport; copy of TIN(); a copy of a diploma of higher specialized education; a copy of the work book to confirm his qualifications.
5 years of general director experience. In addition, the manager's background is checked - whether there are any criminal records, reports to the police, etc.
- Receipt for payment of state duty.
Within 6-12 months, the process of verifying the submitted documents and obtaining a license takes place. Then the company is entered into the Unified State Register of Insurance Organizations. Only after this you can start providing insurance services.
Selection of premises
An important factor is the choice of premises. At the initial stage, you can get by with one small room with an area of about 50 square meters. It can be located either in the center or not far from it, but not on the periphery. It is important that potential clients can reach you quickly.
Once your business begins to generate income, you can think about expanding your office network. In this case, you will need one large office with an area of about 600 sq. m. downtown. Several more small offices in different areas of the city.
Each department should be decorated in a business style. Clients must understand that they have come to a truly serious company.
If you want to save money on premises, at first you can provide insurance services by visiting the client’s home or workplace. But at the same time, you should still have a room equipped in which you will store contracts, documents and simply carry out various telephone conversations.
The insurance business is one of the most profitable and popular in the world. Looking ahead, it is important to note that it is very competitive. If you decide to engage in compulsory motor liability insurance, you will have to compete for market share. In this article, we will analyze the terms and options of the company, and also answer the question of how to open an MTPL insurance company.
To begin with, there are a couple of important factors to note in the insurance business. The first is the difficulty of registering an insurance company from scratch. To do this, you will need at least 120 million rubles of authorized capital. As well as obtaining dozens of licenses and permits. Therefore, the best choice would be to work under a partnership agreement. It consists of obtaining the right to work on behalf of the organization.
How you can work:
- register your business;
- open a broker;
- buy a franchise.
For example, to work as a broker, you can register as an individual entrepreneur, LLC or JSC. The big advantage is that you can cooperate with several companies at once. When searching for clients, you can provide several offers to choose from. That is, you are an intermediary between the insurance organization and clients. And all you need to do is find a client and sell him a policy.
Operation system:
- Search for clients.
- Implementation of MTPL packages.
- Receiving commissions from sales.
Instructions on how to open and what you need to do it
Opening your own company is quite difficult, due to high costs not only for registration, but also for the authorized capital. Let's look at how to open a branch of an insurance company under a contract.
Most likely, when you open a branch, you will work as a franchise. This will allow you to work under a well-known brand and receive advice from franchisees. You will also be able to receive qualified legal assistance, which is very important in this business.
Stages of opening a branch:
- Market analysis.
- Analysis of partner offers.
- Registration of individual entrepreneurs.
- Concluding agreements with partners.
- Search for premises.
- Hiring employees.
Stage 1 - registration and preparation of documents
If you decide to start an insurance project, when registering an enterprise, you will receive assistance from the main office. You will be required to register as an entrepreneur and find suitable premises.
Required documentation:
- individual entrepreneur registration certificate;
- concluded agreement with a partner;
- office rental agreement;
- certificate from the fire inspection.
Stage 2 - search for premises
You can choose any office premises for the insurance company. Most sales will be done online and by phone, so location is not that important. To begin with, 30 square meters will be enough. The office will house the director's office, sales department and accountant.
Stage 3 - purchase and installation of necessary equipment
In terms of equipment, this business will need a standard list of office equipment. You will also need to purchase furniture for offices and the client area, if the latter is available.
What do you need:
- office equipment (35,000 rubles);
- furniture (40,000 rubles).
Stage 4 - selection of employees
In this business, the sales department will play the main role. Given the high competition in such an enterprise, all managers must be professionals. Otherwise, you will not be able to stay in the market. To begin with, one manager and accounting department will be enough.
Required staff:
- sales manager (35,000 rubles);
- accountant (30,000 rubles).
Stage 5 - promotion and advertising
If you work as a franchise, you have at your disposal a brand whose name you can use. This is very beneficial because many clients are chasing the big name of the company. You can use stationary points of sale of insurance policies. We also recommend running contextual advertising on automotive-related resources.
Financial plan
The most expensive acquisition in this business will be a franchise or partnership agreement. Otherwise, the funds spent do not exceed those required to open a standard office. Let's take a closer look.
Necessary investments, with prices in rubles:
- equipment (75,000);
- personnel (65,000);
- rent (75,000);
- franchise for opening a branch (from 150,000).
Total: 365,000 rubles.
Possible risks
One risk in insurance is the lack of clients. Otherwise, the business is a win-win, but if there are more than one hundred clients.
* The calculations use average data for Russia
Starting investments:
100,000 - 400,000 ₽
Insurance agent bonus:
Net profit:
50,000 - 150,000 ₽
Payback period:
Is it realistic to open your own insurance business and how much can you earn from it? We understand the basic concepts and formats, analyze the insurance market, and calculate investments.
The insurance market of the Russian Federation has been on the rise in recent years, this is especially noticeable against the backdrop of a series of crisis events that affect other areas of business in Russia. To enter this market, in our opinion, it is necessary to already have work experience and established clients in this area. Providing sufficient profitability, the insurance business will allow an entrepreneur to start his own business with minimal investment.
Basic concepts of insurance business
Insurance is a method of compensation for losses suffered by an individual or legal entity through their distribution among system participants. Both in business and in everyday life, risks of losses arise from time to time. These could be simple risks such as fire or accident. There may be more complex risks, such as liability for failure to perform a contract or the risk of unintentional harm. The occurrence of all these risks can cause serious financial damage to both legal entities and individuals. Insurance companies will help minimize losses from such risks.
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In short, insurance is a relationship between the insurer (the one who provides insurance services) and the policyholder (the one who insures their risks) to protect the interests of both individuals and legal entities in the event of insured events, that is, certain events that may lead to financial losses of the policyholder, at the expense of funds formed from the insurance premiums they pay. The insurance premium is the amount periodically paid by the policyholder to the insurer in accordance with the insurance contract. It is also called gross premium or insurance premium.
In simple terms, insurance companies collect premiums from policyholders, which over a given period amount to much less than the insurance compensation paid by the insurer when certain losses of the policyholder occur. However, since the insurance company collects premiums from many insurers, some of whom do not actually have risks, this difference between the collected insurance premiums from all insurers and the paid insurance compensations constitutes the income of the insurance company. In this regard, the amount of insurance premiums is carefully calculated based on statistical data on the possibility of an insured event, the number of policyholders and the amount of possible compensation for damage.
This is the main difficulty for the insurance company. If the insurance premium is very high, then it will be unprofitable for insurers to insure, they will prefer to bear the risks of financial damage if losses occur themselves, and the insurance company will not receive income. On the other hand, if the total insurance payments are less than the amount of insurance compensation, the insurance company will go bankrupt.
Additionally, in addition to the amount of insurance compensation, the insurance premium must cover the company's operating costs, provide a certain amount of profit and take into account deductions for the creation of insurance reserves. To accurately calculate and balance insurance payments and insurance compensation, complex mathematical formulas and techniques are used that are developed by each insurance company.
Analysis of the Russian insurance market
In terms of its efficiency, the insurance market can be called one of the most profitable areas of business in Russia. For example, in 2017, insurance companies received more than 1,278 billion rubles in insurance premiums, which is 8.3% higher than the amounts collected in 2016. As you can see, for the current situation in the Russian economy, which is in crisis, such growth rates are very respectable.
On the other hand, in 2017, insurance companies paid 509.7 billion rubles in insurance payments. Compared to 2016, payments increased by only 0.77%. This dynamics characterizes the faster growth rate of income of insurance companies than expenses. It is easy to calculate that insurance companies pay out less than 40% of the collected funds. There are not many industries in the Russian Federation that provide more than 60 percent marginality (that is, the ratio of income and direct expenses).
The growth rate of insurance premiums in the life insurance segment decreased slightly (53.7% in 2017, 66.3% in 2016), but in terms of premium growth, 2017 was a record year - almost 116 billion rubles. In fact, at present, life insurance is the main driver of the development of the insurance market.
Due to the long-term nature of life insurance, payments under these contracts have not yet entered the active phase, which ensures special profitability of the segment. It should be noted that the development of the life insurance segment mainly occurs through the banking channel and is focused on investment insurance, which is offered as an alternative to deposits. When receiving a loan, many banks include in the amount of bank interest a certain amount, which is used to insure the life of the client, thereby the bank, by insuring the life of the client, reduces its risks of non-payment of the loan in the event of his death. Of course, the loan recipient pays for all this.
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There are also illegal ways to attract clients to voluntary life insurance, which are nevertheless actively used by insurance companies. For example, some insurance companies sell compulsory motor liability insurance policies only when purchasing a life insurance policy. This is illegal, but in the regions this technique is actively used by insurance companies.
The main areas of insurance in the Russian Federation are: life insurance, ground transport insurance, aviation and space risks insurance, agricultural insurance, property insurance of legal entities, property insurance of citizens, voluntary liability insurance, compulsory liability insurance of owners of dangerous objects, compulsory carrier liability insurance, compulsory auto liability insurance. As you can see, the insurance market is quite wide.
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Currently, there are 246 insurance companies operating in Russia. The largest number of insurers are registered: in Moscow - 128, in St. Petersburg and the Republic of Tatarstan - 12 organizations each, in the Moscow region - 9, in the Samara region - 7, in the Khanty-Mansi Autonomous Okrug - 6.
The number of insurance companies decreased by 30 in 2017. While in previous years most license revocations were due to failure to comply with regulator regulations and forced revocation of licenses, in 2017 21 companies voluntarily gave up their licenses.
Thus, the general trend in the insurance market is characterized by an increase in its volume and profitability, but large companies are gradually squeezing out their smaller competitors from the market or absorbing them.
Types of insurance organizations: what business is realistic to open
There are three types of insurance business organization in Russia: insurance company, insurance broker and insurance agency. All these three types differ significantly from each other both in the financial model of the business and in the nature of the activity. Let's look at what their differences are.
An insurance company is a legal entity that provides services in the field of insurance and acts as an insurer. The insurance company assumes financial obligations to compensate for damage at the time of the insured event. An insurance company requires a license from the state insurance supervisory authority.
An insurance broker is an organization that provides services to the policyholder in choosing the best insurer and its specific insurance product, as well as assisting the policyholder in receiving insurance compensation. In essence, this is a consulting company in the insurance market, which receives remuneration not in the form of an insurance premium, like an insurance company, but in the form of a commission from the client himself. An insurance broker requires a license to operate. Additionally, the insurance broker assesses the insurer's risks, indicates which risks need to be insured, which company is best to do this with, and how to adjust the contract with the insurance company so that the policyholder is guaranteed to receive compensation in the event of an insured event.
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An insurance agent can be a legal entity or an individual who sells policies on behalf of an insurance company. Remuneration for the work of insurance agents is paid directly by the insurance company. An insurance agency does not require a license. Accordingly, all risks and financial responsibility to the policyholder are borne by the insurance company on whose behalf the insurance agent works.
The main documents regulating insurance activities in the Russian Federation are laws, regulations, standards, guidelines and other documents, of which there are more than 50. Without a qualified lawyer, there is no point in trying to understand this large volume of documents. But if you want to get a general idea of the legal support for insurance activities, start by studying the Law of the Russian Federation of November 27, 1992 N 4015-1 (as amended on August 3, 2018) “On the organization of insurance business in the Russian Federation.”
Let us dwell on the most important point regarding starting an insurance business.
In July 2018, the State Duma of the Russian Federation adopted a law on increasing requirements for insurance organizations. This law provides for a gradual increase in the minimum authorized capital of insurance companies to 300 million rubles (previously 120 million rubles), for those engaged in life insurance to 450 million rubles (previously it was 240 million rubles), for those companies engaged in reinsurance, that is, when one the insurer insures the risks of another, up to 600 million rubles (previously it was 480). The minimum authorized capital of insurance companies providing compulsory health insurance must be 120 million rubles. Thus, the minimum investment in creating an insurance company will be at least 150 million rubles.
To create a company carrying out intermediary activities as an insurance broker, the company will have to provide a bank guarantee in the amount of at least 3 million rubles or documents confirming its own funds in a similar amount.
The law comes into force on January 1, 2019. But you should not try to open an insurance company earlier than this period with a smaller authorized capital, since from the moment this law comes into force, all participants in the insurance market will be required to increase their authorized capital. The requirements for increasing the authorized capital will come into force gradually over several years.
Thus, speaking about the insurance business, we can reasonably exclude organizations such as an insurance company from the list of companies possible for opening a business, since the requirements for opening one are very high and will become more stringent. We can only talk about a company operating as an insurance broker or insurance agent.
Insurance broker vs insurance agent – which is more profitable?
There are about 70 insurance brokers in Russia. This is a very small number of companies for a country with a population of more than 140 million people.
As we wrote above, an insurance broker helps the insurer choose and obtain the best conditions on the insurance market for its insurance product. However, he also pays for the services of an insurance broker. Of course, the policyholder saves his own time on studying the entire market and the many offers on it, as well as searching for a truly reliable insurance company.
The remuneration for the services of an insurance broker is about 20% of the cost of the policy. This is quite a significant amount; the client is not always ready to make such expenses. In addition, the amount of the bank guarantee or the insurance broker’s own funds must be at least 3 million rubles.
Additionally, the existing requirement to use the new chart of accounts requires software costing about 1.2 million rubles, and another approximately 400 thousand rubles per year is required for its maintenance. And this is in addition to the costs of employee salaries, office maintenance and other business expenses. This situation leads to the fact that the number of insurance brokers decreases every year - many players in this market refuse licenses.
Of course, there are a number of companies that call themselves insurance brokers, but no more than 5% of them have a license for brokerage activities, that is, only these 5% operate legally.
As for insurance agencies, there are practically no requirements for their work; their activities are regulated by the insurance companies on whose behalf they work. You can register a limited liability company and work as an individual entrepreneur. There are no requirements for authorized capital or special forms of accounting. The only difficulty is the need to pass an interview with the insurance company for which you want to be an agent. It is necessary to demonstrate both knowledge of the insurance market and an established client base. Of course, preference is given to agents who already have experience working in insurance companies.
So, we conclude that currently in the Russian Federation, organizing the activities of an insurance broker is a very costly and complex matter. If we are talking about a small business, then it is necessary to open an insurance agency.
Insurance agency income and expenses
The activity of an insurance agency is working with people. Essentially, an insurance agency is a company that employs several insurance agents.
As we wrote above, opening an insurance agency is a business for professionals. It is suitable for those who have worked as an insurance agent on the company staff for some time. And if you are such a professional, then business will be up to you. It is advisable to start opening an insurance agency with one person. This makes it easier to see the insurance business and its prospects from the inside without any special investments.
At the first stage, to open such a business, it is better to open an individual entrepreneur. At first, you can do without an office altogether. All you need is a computer, a printer with a scanner and a workspace. That is, the minimum investment to open such a business will be about 50 thousand rubles.
The main OKVED code should be 66.29.9 “Other auxiliary activities in the field of insurance, except for compulsory social insurance.”
If you already have sufficient work experience and know the business, then you can open a company with three or four insurance agents. The cost of opening a company with three working insurance agents will be about 150 thousand rubles. The requirements for an office, in this case, are minimal, so you can choose a small ready-made room, preferably with furniture and not in need of renovation. There are enough such premises on the commercial real estate market in any region.
Of course, such an insurance agency will not immediately break even, like any business. But the salary of an insurance agent, as a rule, consists mainly of the bonus part, the salary part is minimal. Therefore, for a three-person agency, you will need to set aside a small revolving fund to pay office rent, a small portion of employee salaries, and other operating expenses such as communications and office supplies. Thus, to open a small insurance agency you will need about 400 thousand rubles.
Of course, you can get by with a much smaller amount, but in such a business it is advisable to have a small reserve of finances to ensure the operation of the company, which is necessary to develop regular customers and work out business processes. The minimum investment amount, in our opinion, can be 100 thousand rubles.
The insurance business is successful when the insurance agents are professionals. The average insurance agent premium is about 10-30% of the policy cost, depending on the type of insurance product. As a business owner, you keep a portion of what the insurance agent earns and that is income for your business.
Most often you will have to sell insurance products in the following areas:
OSAGO and CASCO;
life and health insurance;
property insurance for individuals and legal entities;
business insurance.
If you have three qualified insurance agents, your company’s profit will be about 50-70 thousand rubles per month at the initial stage. Then everything depends on how successful the sales will be. In case of successful sales, your company’s profit can increase, with the specified number of employees, up to 100 - 150 thousand rubles. If things go well, the staff of agents can be expanded to 10-15 people.
As a rule, the payback period for investments when opening an insurance agency is from 3 months to six months.
Marketing and promotion of an insurance agency
First of all, you need to understand your potential client. Study his motives, income, determine what insurance products the client needs in the first place.
The basis for success in the insurance business is personal contact with the client. Therefore, the personal qualities of insurance agents come first. Communication skills, excellent knowledge of insurance products, and presentable appearance of agents are the basis for success. The basics of sales technology, working with objections and knowledge of the basics of psychology are mandatory for an insurance agent.
It is necessary to make a good and understandable website with the products of your insurance agency. Promotion on social networks can also significantly increase the number of your customers.
More than 80% of information about the agency should be of an image nature and aimed at creating a positive view of your agency from the point of view of buyers of insurance services.
Franchise insurance agency
Purchasing an insurance agency franchise allows you to reduce the risks of starting a business. You receive the right to work on behalf of a well-known brand, a certain flow of clients sent directly by the franchise owner, a set of training courses for agents and business process regulations. In some cases, you will be provided with legal and accounting support for your business.
The cost of purchasing such a franchise is from 50 thousand rubles. The required investments in opening a franchise insurance agency range from 120 thousand rubles. Royalty starts from the amount of 8 thousand rubles.
Additionally, the franchise owner can provide the following services:
training employees in insurance products and sales technologies;
There is serious competition in the insurance market these days. But despite this, new organizations are constantly appearing that offer various services in this area. Many entrepreneurs who have decided to choose such an activity for themselves are interested in how to open an insurance company in Russia? They can get answers to many questions in this article.
Registration
Before opening an insurance company, first of all, you need to register as a legal entity. This may be an LLC, a closed joint stock company, or a mutual insurance company.
The authorized capital of a small insurance company must be at least 20 million rubles. If you want to offer life insurance to clients, the amount should be much higher.
To carry out activities in the field of insurance, you must obtain a special license. It usually takes about 6 months to complete this document.
To obtain a license you must provide the following documents:
- Business plan;
- Calculation of tariffs and insurance rules;
- Documents confirming the education and qualifications of the general director;
- Constituent documents.
By franchise
Most clients enter into contracts only with large, reputable organizations that have extensive experience in this field and an impeccable reputation. Small start-up insurance companies do not inspire much confidence, so many are interested in how to open a franchise insurance company. An organization that operates from a well-known company moves faster in the market and finds new clients.
Some companies that have managed to gain sufficient fame offer to buy franchising from them. In the insurance business, the franchise will be inexpensive. It can be purchased for 150 thousand rubles.
Money and services
When drawing up a business plan for an insurance company, you should take into account the costs of renting or purchasing premises, furniture, office equipment, various office supplies, etc. In addition, you should calculate how much money you will need to pay employees, transportation, marketing, advertising and utilities.
Start-up costs should be distributed as follows:
- Authorized capital. For this you will need approximately 20 million rubles.
- Renting the premises will cost 2-3 million rubles.
- Paperwork and company registration – 500 thousand rubles.
- Office renovation – 200 thousand rubles.
- Office equipment – 650 thousand rubles.
- Marketing and advertising events – 100 thousand rubles.
- Staff salary – 3 million rubles.
- Unforeseen expenses - 350 thousand rubles.
If you calculate all these expenses, it turns out that to open an insurance company you will need a starting capital of 675 thousand dollars. Now you know how much it costs to open an insurance company. This is a fairly large amount, but if things go well, the profit will be appropriate.
Staff
Since official insurance companies select only highly qualified specialists for work and pay them good salaries, professionals do not sit without work. In addition, the influx of new personnel in this area is small, since only a few universities teach the specialty “insurance”. Therefore, to select personnel for an insurance company, you should contact a recruitment agency. It is advisable to recruit at least 150 experienced insurance agents per year.
An insurance business will be profitable only if it employs experienced, qualified employees. For a company to prosper and be profitable, employees should be motivated with high salaries, bonuses and a social package.
You can offer training to employees. Since this is quite an expensive pleasure, you can indicate in the employment contract that after training he must work for you for a certain time.
Insurance company branch
According to the law, foreign companies that deal with insurance can operate freely in our country. Therefore, many are interested in how to open a branch of an insurance company? The most important thing is to comply with all requirements established by the law of the Russian Federation. If controversial issues arise between citizens of the Russian Federation and a foreign company, they will be considered in Russian courts.Organizations that have been engaged in this activity for more than 5 years can work in our country. If they offer life insurance, you must have at least 8 years of experience. In addition, they must have branches that have been operating for at least 5 years. Moreover, the financial asset of such an insurance company should be $5 billion.
Office
Insurers typically rent office space. In principle, you can open an insurance company office in any area. The most important thing is that customers can easily reach you.
You should not rent too expensive office space in the city center. For a start-up company this is an unaffordable luxury. Choose a decent, inexpensive room that will meet all the established requirements. This is the simplest and most affordable option.
Main problems
- The following serious problems may arise in the insurance business:
- The small size of the authorized capital does not allow us to engage in insurance of large objects.
- Low solvency of the population. People who have little income refuse to pay insurance premiums, so the demand for services decreases.
- Lack of government support. In most areas of life, compulsory insurance is not established.
Various pitfalls are found in different areas of business activity. To achieve success, you need to go through a long road of competition. The main thing is to be able to explain to clients that insurance is a necessary and useful service.
Secrets of the insurance business
In order for a company to prosper and make a profit, prices should be reduced at the very beginning of its activities in order to attract the attention of customers with favorable insurance conditions. Offer them programs of both compulsory and voluntary insurance. If you don’t know what it takes to open an insurance company, contact leading experts in this field who can advise you on various issues.
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Profit and profitability
An insurance company will grow faster if you offer clients an expanded list of services. Some experts believe that the insurance business has no future in Russia. But that's not true. If you constantly monitor the market, analyze the opinions of experts and develop effective marketing activities, you will definitely achieve success.
An insurance company as a business will become a promising area of activity if you have impressive start-up capital and are determined to succeed. It is impossible to calculate profits from the first days of work, therefore, to be on the safe side, you can insure your starting capital in another company. In this case, even if you have to pay several fairly large amounts, there will be no serious threats to your business.
Are you interested in the idea, but don't have enough money to open such a serious business? Then we recommend that you take a closer look at less expensive ideas, for example
