Insurance company can be defined as a company that is concerned with the coverage of loses, hardship in payment of bills such as hospital bills, and many other related damages to the respective individuals or organizations after determination of risks associated with the occurrence of events that led to loss so as to get the exact cost. Step number one when starting an insurance company is writing a business plan which consists of the values, services that will be provided, available products, how customers will be acquired, advantages over competitors, risks, cash flow, and target market.
Step number two to consider when starting an insurance company is choosing a legal structure, and the manager may decide to choose from the structures such as sole proprietorship, corporation, limited liability corporation, and partnership which determines the level of personal liability someone takes on.
The next step to consider when starting an insurance companies is choosing and registering agency’s name which one can do considering his preferred structure for example if one is a sole proprietor he will have to use his name and if that is not preferred then he can choose name that, conveys agency’s benefits or easily searchable.
Another step to consider while starting an insurance companies is registering the business with the State where here one has to contact his state insurance commissioner’s office who will have a checklist for registering your business and this must be done in order to pay the state and local taxes.
The sixth step is getting your business licenses and permits that are required for one to run the business legally. Insurance companies have several benefits, and one of them is compensation of losses to those who may have suffered damages and have an insurance cover to pay them. Another benefit of insurance companies is enhancement of risk control activities by carrying out the risk analysis so as to come up with the exact cost to be compensated which avoids payment of losses that may have been suffered intentionally.
The third advantage of insurance companies is these companies reduces the social burden to the victims of the loss or damage occurred especially if the government has not compensated them.
The other significance of insurance companies is that the company can be able to invest more from the collected premiums which can be done by investing in vehicles then pay back claims if they occur.
One who is considering which insurance companies that he will approaching order to take an insurance cover is advised to make a good number of considerations and one of it is the value of premiums charged by given insurance companies; he is advised to choose that whose charges are relatively low.