How To Start A Successful Insurance Company | The Ultimate Guide 

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Ever dreamt or pictured what and how it would look like to own your own insurance company? Insuarance companies in the world are actually raking in billions year in and year out, but the question is, how does it work? How can I get started? and lots of other different questions probably pop into your mind. 

Now let’s get you going. Read along. But before we proceed, let’s take a look at what exactly insurance itself is and how it works.

What Is Insurance?

What Is Insurance?

According to Wikipedia; Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

However, an insurance is an agreement in the form of a policy between two individuals or entities through which a person receives monetary protection against damage or loss from an insurance firm. Once someone insures a particular property, in any case of damage to the said property, the insurance company pays for it.

How Does Insurance Work?

Today, there are lots of insurance companies and policies in the world in which anyone or business can reach out to them in order to insure any property at a given price. But the most common types of personal insurance policies are house, car (auto), health, and life insurance. 

Once an individual insures any of these properties, In the event of damage or loss of the property, the insurance company pays for or restores it. The same is applicable to business insurance. It’s just that the policies are quite different, but the payment and restoration things are the same.

Policies for insuring a business vary greatly in order to cover the risks faced by some businesses.

Difference Between Insurance Agent vs Broker

Insurance agents and brokers help small-scale business owners get their business or properties insured at an affordable price.

However, as we explained the two together, you might be wondering if they are the same. Actually, the two are almost the same, but there’s still little difference between the latter and the former.

But since we’re talking about insurance companies today, let’s start there.

What Is An Insurance Company

Insurance Company

An insurance company is a financial institution that offers different insurance policies to protect individuals and businesses against the risk caused by financial losses in return for the payment of premiums. 

In a layman’s definition, it’s simply a company that deals with the offering and selling of insurance. Whichever way you define it, the main thing is that an insurance company is an institution that bears the risk of individuals and businesses in the event of loss or damage for a given payment. 

Types Of Insurance

There are different things and entities one can insure. Virtually everything can be insured. The following are the types of insurance you can get from different insurance companies:

Automobile insurance

Life insurance

Business insurance

Insurance for properties

Health insurance

Education insurance

Travel insurance 

4 Basic Things Needed To Start An Insurance Company

1. Analysis Of The Insurance Industry

For you to run a fruitful insurance company, there is a need for you to understand how it works, what is expected of you, and the services you can offer. even much more than just that. 

Analyzing how an insurance company works and how it should be dealt with should be your first target. You need to learn how to deal with different things that you may encounter in the insurance business. Not only that, because I believe as a newbie, you are probably starting this not to be called an insurance business owner but how to make and offer better services to people.

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2. Business Plan

Just like any other business in the world, you must create your own plan. As the adage goes, “He who fails to plan, plans to fail.”

Honestly, it’s not only you planning, as everyone can plan. Otherwise, your company’s advertising and outreach will fall on deaf ears.

So, your business plan shouldn’t be just a plan but a master plan. The insurance business is really competitive and has lots of different companies with big names. You can’t even get enough customers if your plan is not solid as a new company. 

Exceptionalism remains the only thing that can make you stand out, and achieving this requires you to spring up ideas, gather opinions, do research, and draw out your plan if you truly want your insurance company to thrive.

3. Location

The place  you site your business is also important. You have 3 different alternatives for this; it’s either you make it an online company (where you work from home), rent a space where you can carry out your business, or you buy a building for it. It all depends on your budget and, of course, the kind of insurance company you picture having.

If you are renting or buying a building for this, I advise that you take note of where you want to site it, as you shouldn’t site it in a place (town or city) where you know an average of the population can’t even afford insurance. It’s much better in civil service and business areas, just like New York City in the United States

4. Finding New and Existing Clients

After you have done the aforementioned, the next step is to start looking for new customers and how you can maintain them. This is where the task lies the most, yes, it is.

You need to make your company known first, start launching different marketing campaigns and advertisements online and offline. 

By this means, and with a great marketing plan and strategy, you can attract lots of clients. Some of these prospective clients might already have insurance elsewhere. You need to woo them to your company.

Five (5) Major Things To Consider When Starting An Insurance Company

1. How Much Should You Invest?

Starting an insurance company can cost between $10,000 and $50,000, or even more, with the most expensive insurance firms costing between $100,000 and $1,000,000, depending on the services you want to provide.

You need more money, but just invest wisely and as much as you can. The insurance business is worth investing in because returns are always high. 

2. Capability

An insurance company requires only people who are confident, can take the bull by the horns and know how to deal in business.

When trying to start a protection business, if it’s actually something you can do or it’s not, you don’t have to force it simply because it’s profitable.

3. Partnership Or Sole Proprietorship

Many small start-ups often join with other insurance agencies to form a bigger force. It’s good to partner with others in starting a business like insurance just to make it more effective and non-reliant on a single person. Plus, the investment becomes bigger since you are not the only one paying for it.

Meanwhile, sole proprietorship is actually good too, if you have the finances and capabilities to start and manage it effectively.

4. Organizational Advertisement

You probably don’t want your security company to be invisible, which is why you should think about effective advertising. If you don’t tell people about what you are selling (which is insurance), how on earth will they know? Definitely not, except for a few persons who are very close to you.

Effective advertisements can be achieved through different media such as radio, newspapers, journals, podcasts, billboards, e.t.c. also online too, with different social media posts, ads and videos.

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5. Paper Work And White Papers

For any establishment, there is some paper work you need to do in order to keep everything running smoothly.

Also, white papers are good so that you can write a kind of report on where you want the insurance business to be in the near future.

How To Start An Insurance Company: A Complete Step-By-Step Guide

These steps below include the things you need to get done for you to operate successfully:

Step 1: Develop A Business Plan

You ought to write down your strategies so that you will know which direction you want your business to head in. A proper business plan will also give room for what your prospective partner, client, workers, transporters, e.t.c. are to do.

Though your business strategies may change over a period of time, penning the ones you have at hand down is very good and important as it stands as a direction guide for your business.

Step 2: Determine Your Legal Structure

The way you structure your business matters a lot as it defines the level of risk you are willing to take. Irrespective of the structure you choose, great protection will help in making your establishment secure in times of challenges.

Step 3: Choose And Register Your Agency’s Name

If you are actually not in partnership with anyone, your real name should serve as your agency name since you are the sole owner. 

Just go ahead and get it registered as a trademark and registered organization with your state cooperative affairs commission. In that way, businesses can steal your brand name. You are only charged a little compulsory token for this depending on your country of residence.

Step 4: Obtain A Tax Identification Number

For you to be able to operate successfully as a registered insurance company under the government, you have to pay taxes. It’s unavoidable. Just go get a tax I.D and start tax payment. This also helps clients trust your organization since you are a registered tax payer under the government.

You Can Read How To Obtain Tax Identification Number In Nigeria

U.K And U.S

Step 5: Register Your Business With Your State

You need to get this done before you start operation, so you will be given a business I.D number by the government. The identification number is needed and you should include it in some of your advertisements and forms so that prospective clients will believe your company is there to stay and not wade away with people’s investment and money.

Step 6: Get Your Business Permits And License

Even after getting registered to operate as a business in your state, since an insurance company is a professional business, you might have to get a license and permits in order to start operating.

Step 7: Purchase Insurance To Protect Your Investment

Business protection is key in any business, even if you are also starting your own protection business. It’s simply to protect against different risks, especially if you have bought or rented a business space. You may need to secure different properties in it in case of danger or damage. 

Starting your own insurance business can be quite a task, but nothing is easy unless you don’t want to achieve your business aims.

However, you can checkout these great business insurance companies in Nigeria and other countries, such as;

Leadway Assurance

Lasaco Assurance Plc

Custodian and Allied Insurance etc

Top 10 Insurance Companies In The World 

The insurance business is really booming in the world today, netting billions of dollars yearly. In fact, insurance is currently one of the richest businesses on the planet right now. 

List Of Top 10 Biggest And Best Insurance Companies In The World

•United Health Group (United States)

•Ping An Insurance (Group) Company of China Ltd. (China)

•AXA S.A. (France)

•China Life Insurance (Group) Company (China)

•Kaiser Foundation Group of •Health Plans (United States)

•Anthem-(United States)

•Allianz SE (Germany)

•People’s Insurance Company (Group) Ltd.-(China)

•Assicurazioni Generali S.p.A.-(Italy)

•Centene Corporation (United States)

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Top 10 Insurance Companies In Nigeria And Their Owners (CEO)

Insurance businesses in Nigeria have over the years not really been as much as it ought to be due to the fact that most Nigerians don’t actually know much about insurance and the benefits of getting insured.

However, there are some companies that have really created a landmark in the insurance industry in Nigeria. Some of them are indigenous, while greater numbers are actually owned by foreigners.

Insurance companies in Nigeria provide different protection policies and services, some of which include;

Automobile insurance.

Life insurance

Business insurance

Insurance for properties

Health insurance

Education insurance

Travel insurance

Below are the lists of the top insurance companies in Nigeria and their Chief Executive Officers:

1. LeadWay Assurance PLC

LeadWay Assurance

Leadway Affirmation was founded in 1970 by Dr Hassan Odukale and started its operations as a registered insurance company in Nigeria. It currently tops all insurance companies in Nigeria.

Mr. Oye Hassan Odukale

The company is currently being managed by Mr. Oye Hassan Odukale.

2. AIICO PLC

AIICO PLC

American International Insurance Company is a foreign insurance company founded in 1963 and started operating in Nigeria in 1990.

Babatunde Fajemirokun

Babatunde Fajemirokun became the Managing Director and CEO of AIICO Insurance PLC, in August 14th, 2019.

3. AXA Mansard Insurance

AXA Mansard Insurance

The company is one of the largest insurance companies in the world, with operations in over 64 countries and over 100 million clients. It has one branch in Nigeria.

4. Corner Stone Insurance PLC

Founded in 1991, it was listed on the Nigerian stock exchange in 1997. Cornerstone Insurance is currently one of the leading insurance companies in Nigeria.

5. Prestige Assurance PLC

The Prestige is an acronym for Prestige Assurance PLC.

Assurance Company is an Indian insurance company with one of its branches in Nigeria. The company was founded in 1952 in India and currently operates in over 20 countries in the world. Its Nigerian branch is being managed by Dr. Swamy Balla.

6. Custodian And Allied Insurance 

Custodian and Allied Insurance Company is a Nigerian insurance company that was founded in 1997. The company has remained people’s choice due to the kind of quality protection they provide.

7. GoldLink Insurance PLC

Gold Link Insurance Company plc is ranked seventh.

Gold Link Insurance Company is an indegenous insurance company founded in 1992 but was licensed in 1993 by the government.

It was listed in 2008 on the Nigerian stock market after it went public in 2007.

Gold Link Insurance is known to offer one of the best insurance policies in Nigeria.

It currently has Kenneth Edeore Egbanran as the Chief Executive Officer and Yakub Yusuf as the Managing Director.

8. Continental Reinsurance Company PLC

Reinsurance Plc is a pan-African insurance company founded in 1985 (it’s Nigerian branch). It is currently present in over 50 countries in Africa and other continents.

It’s currently managed by Femi Oyetunji (CEO) and Lawrence Nazare, who’s the Executive Director.

9. African Alliance Insurance Plc 

Founded in 1960, African Alliance Insurance Company is one of the oldest and top insurance companies in Nigeria. It’s being managed by Mrs. Funmilayo Omo, who’s currently the managing director.

10. Industrial and General Insurance Plc 

The company was established in 1991 and licensed in 1992. It became the first private insurance company in Nigeria to generate one billion naira income in 1996.

It’s currently being managed by Rachael Coke Emenike (MD) and it currently serves as the official insurer of Nigerian football teams.

Available Jobs To Apply For Insurance And Their Average Salaries

Insuarance companies really pays well if you are thinking of looking for employment there. Below are some of the offices you can apply for in an insurance company and their salary structure.

Job Position-Average Salary Scale

Actuarial Analyst -N445,000

Actuarial Assistant -N331,000

Actuary -N468,000

Adjustment Insurance Clerk- N129,000

Assistant Broker -N204,000

Claim Advocacy Professional- N347,000

Claims Adjuster-N131,000

Claims Analyst- N176,000

Claims Resolution Specialist-N357,000

Claims Supervisor -N345,000

Complaints Specialist- N295,000

Eligibility Specialist- N335,000

Insurance Policy Processing Clerk- N128,000

Sales Director- N575,000

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