Insurance Agency Business Plan

This article provides a comprehensive Insurance Agency Business Plan for Real Life Insurance Company, a local and self-independent company specializing in commercial and individual insurance offering. It includes an introduction, aim, description of organization, keys to progress, objectives, vision and mission, guiding principles, situation analysis, SWOT analysis, segmentation, target, and positioning. The article also covers marketing strategy and implementation of the business plan. Course code, course name, and college/university are not mentioned.

TITLE:
INSURANCE AGENCY BUSINESS PLAN
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Table of Contents
TITLE:.......................................................................................................................................................1
INSURANCE AGENCY BUSINESS PLAN...........................................................................................1
Acknowledgements.....................................................................................................................................3
Executive summary.....................................................................................................................................4
Introduction.................................................................................................................................................5
Aim.............................................................................................................................................................6
Description of organization.........................................................................................................................6
Keys to progress..........................................................................................................................................6
Objectives....................................................................................................................................................6
Vision and mission of the action insurance.................................................................................................7
Business objectives......................................................................................................................................7
Aspiration of the company..........................................................................................................................7
Guiding principles........................................................................................................................................7
Situation analysis.........................................................................................................................................8
Environmental analysis of the real-life insurance........................................................................................9
Internal environment analysis.....................................................................................................................9
External environment analysis....................................................................................................................9
Macro environment analysis.....................................................................................................................10
Micro environmental analysis...................................................................................................................11
SWOT analysis of the Real Life insurance company...................................................................................11
Strengths...................................................................................................................................................12
Weaknesses...............................................................................................................................................12
Opportunities............................................................................................................................................12
Threats of Real Life Company....................................................................................................................13
Segmentation, target, and positioning......................................................................................................13
Segmentation............................................................................................................................................13
Demographic segmentation......................................................................................................................13
Behavioral segmentation...........................................................................................................................13
Psychological segmentation......................................................................................................................14
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Geographical Segmentation......................................................................................................................14
Target market............................................................................................................................................14
Marketing strategy and Positioning...........................................................................................................14
Marketing mix (7P's)..................................................................................................................................15
Product/services........................................................................................................................................16
Price...........................................................................................................................................................16
Promotion.................................................................................................................................................16
People........................................................................................................................................................16
Place..........................................................................................................................................................17
Process......................................................................................................................................................17
Physical evidence.......................................................................................................................................17
Implementation of the business plan........................................................................................................17
Beneficial assumptions..............................................................................................................................18
Assumptions of Income.............................................................................................................................18
Expenses assumption................................................................................................................................19
Balance sheet............................................................................................................................................19
Conclusion.................................................................................................................................................19
Recommendations.....................................................................................................................................20
References.................................................................................................................................................21
Appendix...................................................................................................................................................24
Figure 1: MARKETING MIX.........................................................................................................24
Figure 2: START UP COSTS........................................................................................................24
Figure 3 :BALANCE SHEET.........................................................................................................25
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Acknowledgements
I would kindly like to acknowledge the following for their contribution toward my research.
1.
2.
3.
4.
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Executive summary
Real Life Insurance Company is the latest and self-independent oriented insurance
organization in Australia. The insurance is owned by several investors in which each contribute
equally to the growth funds. In general, most of the investors have an experience from the
different insurance company that they have served in past (Rummler and Brache, 2012 pp.88).
The investors introduced the name Real Life Insurance Company – was not just given because of
the acting process of the insurance organization to the customers but also because the agency
will offers real and convenient services. The insurance organization meets the customers'
insurance needs at their home, business places or via online. With the latest technology, the
clients can use the latest insurance app in accessing its (company) services.
The research on the insurance offering sector is geared toward obtaining a reliable source
of insurance offering company which can meet agent needs of the clients without any delay. To
obtain data on the insurance sector most of the research mostly relied on the secondary sources
such as journals and articles. Partly the researcher visited some of the insurance companies to
strengthen the accuracy of the secondary data (Agrawal et al, 2014 63-97).
Clients being the main determiner of the market direction of this kind of business. Most
of the strategies formulated in every organization should be friendly and attractive to the clients.
From the research, it has been noted that most of the existing insurances company declines due
to the implementation of harsh strategies to their clients. Such strategies should be are limited in
the action insurance company which will continuously lead to growth in this company.
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Introduction
Aim
The research aims to initiate a reliable insurance company which customer service
offering oriented. The research is also aimed to bring a remedy to the existing management
problems in the insurance sectors.
Description of organization
Real Life Insurance Company is a local and self-independent company specializing in
commercial and individual insurance offering. The company knows the clients from the
information he/she is willing to offer to the offer. The Real Life Insurance Company is geared to
initiating a strong partnership with the clients, insurance carriers and its workers (Rummler and
Brache, 2012 pp.88).
Keys to progress
Being familiar with the rule of Golden, that says that everyone should treat others the
way you would also enjoy being treated act as a guiding key in our services offering process. The
organization is geared toward treating others better than our expectation. The Real Life Insurance
Company believes in the following keys to success (Yücenur and Demirel, 2012 pp.3702-3707).
Commitment to the clients. The company will continuously urge its stuff to handle the
customers' issue with a lot of commitment
Technology investiment.to make the services more effective and fast the company will
innovate in the technology sector that improves the service offering process to our clients.
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Objectives
Vision and mission of the action insurance
The Real Life Insurance Company wants to develop a bar in the sector of insurance by
initiating excellence and making use of the super principles to all the aspects of the business. The
organization has the aspiration to empower the clients, the workers and the community at large
(Røttingen and Chamas, 2012 pp.6).
Business objectives
Real insurance believes that to offer variety selection of insurance services the
organization must first show growth. For the action insurance to grow it should meet the
following objectives.
 Revenue should be increased at a rate of 15% annually for the organization to capture
high market share. Such an objective will influence the growth rate of the organization.
 It should also obtain appointments directly by year 3 hence reducing the expense annual
basis. This another objective which will widely influence the high attraction rate to the
clients which will be of greater advantage to the organization at large (Agrawal et al,
2014 63-97).
Aspiration of the company
The Real Life Insurance Company is geared toward achieving reliable and quality service
to the clients. With the most of its investors having worked in other insurance company, the
action insurance company will attain the highest marketing environment. The investors will
exchange mind on the weaknesses observed from their previous working companies and try to
use the weaknesses as a weapon to pressure their competitors for the benefits of the clients
(Johnston et al, 2011 pp.659).
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Guiding principles
Real Life Insurance Company will deploy honesty and transparency in the industry. The
insurance company believes in the following:
Honesty is the best policy. The agents /staff of the action insurance will conduct their
operations in a fairly and equitable manner.
Being consistent.at the company the consistency is portrayed by treating our clients
individually with super attention to detail.
Situation analysis
Real Life Insurance Company is expected to display a tremendous growth in the
insurance marketing sector. Analyzing the current condition of the company with the reference to
the reason why the company will be introduced, the organization can be said to have covered
majority of people's life expectancy at a reasonable price. The real-life insurance company is
currently positioned among the top companies that have portrayed recommendable growth in the
insurance sectors. The initiation of the Real Action insurance company will cover major factors
that affect individuals. Within 3-years' time, the organization have covered a wide range of
factors that affect the real lives of individuals. Some of the services that the company has been
offering include:
 Health insurance-this covers the client in case he/she is feeling unwell
 Travel insurance-this covers all the issues that may arise during the traveling such
accident
 Car insurance-the insurances secure the car in case it is stolen or experiences an accident
 Pet insurance-the insurance covers the home pet of the clients
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 Landlord insurance-this may cover the land and structures constructed on the piece of
land
 Funeral insurance- the real-life insurance covers the burial expenses of their clients
 Income protection insurance and others.
Such a wide range of services describes how the Real Life Insurance Company will
experience a high growth rate.
Environmental analysis of the real-life insurance
Internal environment analysis
The company can be analyzed internally regarding its resources and capability of its
service provision.
Resources analysis. Real Life Insurance Company will have a wide range of resources
both financially and technological wide. The financial stability of the organization will make the
organization to withstand economic issues after introduction. For example, if the organization
has a poor financial background it appears hectic for it to survive harsh conditions that are
experienced by many business during the premature stage.
Capability analysis. The tremendous growth of the Real Life Insurance Company has
defined the capability of the company in its service-provision process to the clients. The growth
rate of every organization is said to articulate the capability Real Life Insurance Company will
introduce new insurance issues that affect the human life which is a major display of its
capability.
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External environment analysis
External environments define the organization regarding macro and micro perspectives.
Macro environment analysis
The analysis is described by the following factors:
Political.it is clear that politics determines the direction and rate of growth of an
organization. Positive political field effects to positive growth of the business and negative
political fields demolish the growth of the business. The Real Life Insurance Company has
experienced a lot of favor from the political field.
Economic analysis. Under this analysis, the economic status of the market of business
specialization can either be poor or healthy. Under poor condition, the chances of failure of the
business are very high. While under the healthy condition the business displays a flourishing
growth. Analyzing the expected condition concerning an economic condition of the Real Life
Insurance Company can be defined that it has and it will enjoy a healthy market condition in the
insurance business sector.
Social. The social practices of the population that surrounds the Real life insurance
company in Australia have prayed a more significant role in the company's succession. For
example, you cannot introduce farm produce insurance Company in urban regions. Most of
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farming insurance company are located near the farmers because the social practices of the
population there favor the business.
Technological analysis. Real Life Company has shifted to technology-based business to
perfect its service provision process. For example, Real Life insurance will implement the digital
recording methods for its members and also introduce an app to reach many clients.
Legal .The legal practices of the Australian government also has contributed to the
growth of the organization. As it has been in the past, the organization will legally meet the
government requirements.
Environmental analysis. The Real Life Insurance Company is environmentally favored.
The regions that are covered by the organization do not experience the “acts of nature” such as
storms and floods which effect to loss insurance delivering companies.
Micro environmental analysis
The microanalysis includes the following:
Competitors. The kind and pressure generated by the competitors describe the market
environment of the company. Real Life Insurance Company expects to continually experience
fairly competition pressure from its partners. To neutralize the generated pressure the company
will respond by implementing corresponding strategies to avoid losing its clients (Jenson et al,
2013 pp.8).
Customers. The organization will be keen on the issues that affect the customers.
Customers being the key determiner of the company existence, the management of the
organization will actively innovate on strategies that will sustain their customers.
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SWOT analysis of the Real Life insurance company
The SWOT analysis defines every organization regarding their strengths, weaknesses,
opportunities, and threats.
Strengths
New products and services. The organization has a wide range of new products to cater
to different segments. Due to a wide range of services the company relies on a vast number of
clients.
Business growth. The company expects to experience a high growth rate and dominance
in Australia which will attract a big number of clients seeking the company service.
Emerging middle-income group. The country has been experiencing a rapid increment
of a middle-income group in which a more significant percentage of this group seek services
from the Real Life Insurance Company (Tushla et al, 2015 pp.1696-1702).
Weaknesses
The dominance of the public sector. Public (government) insurance company have been
dominant in the insurance sectors in a way affecting celebrity of private companies such as Real
Life Insurance Company (Merton, 2014 pp.43-50).
Old tariff structure. Most of the clients are used to old tariff structure in the insuring
sectors. It is challenging for the organization to shift their minds to modern tariff structure. For
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example, some the organization have been losing customers who completely trust old structures
(Boelens, 2010 pp.28-62).
Opportunities
Strong future growth. The sector of the insurance has been wholly experiencing high
growth rate. Such growth predicts the possibility of high growth in the future which gives the
company hope for future expansion (Moran et al, 2012 pp.95).
Rising income and awareness. This opens up an opportunity for the Real Life Insurance
Company. Many investors and individual have entirely invested in housing.
Threats of Real Life Company.
In general, the organization has been receiving threats from its competitors and the
increment of taxation in the insurance sector by the government. Some of the threats have been
an effect of the natural calamities such as storms and floods (Moran et al, 2012 pp.95).
Segmentation, target, and positioning
Segmentation
Segmentation in marketing is a technique that is implemented to enable the business to
completely target it services at the right customers (Lusardi and Mitchell, 2014 pp.5-44).
There exist 4 types of market segmentation as described below.
Demographic segmentation.
This is the most comprehensive type of segmentation that is applied in many businesses.It
divides population on basis of variables such as age, gender, family size, income occupation etc.
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(Englix, 2013 pp.16).The Real Life Insurance Company will widely implement this method of
segmentation in defining its clients.
Behavioral segmentation
This type of segmentation divides the targeted population on basis of their behavior and
decision-making pattern (Alipour, 2012 pp.53-66). For example, the Real Life Insurance
Company will handle the youth and old people respectively to their mode of behavior. The youth
always prefers fast processes while the old people prefer slow processes.
Psychological segmentation
This type of segmentation looks similar to behavioral segmentation only that it defines its
population on the basis of social behaviors (Arasa and K'Obonyo, 2012 pp.201-213). The
segmentation will be deployed by the Real Life Insurance Company while providing services to
the clients. For example, when handling clients the organization willobserves the social
requirements of various social groups in Australia.
Geographical Segmentation
The segmentation divides people on the geographical basis. This because the customer
has different need based on their geographical location. For the Real Life Insurance Company
(though at minimal chances) it will divide its clients regarding geographical description to
ultimately meet their need at full.
Target market
The company will target its market on demographic perspectives. This is because the
segmentation inclusively covers individuals' definition without caring about their geographical
location and type of social classes they come from. Currently, the Australia government is
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working on a program that unite indigenous people with rest of the population. Demographically
targeting the customers will be one way of treating clients equally without bothering the
geographical location and social description of the clients (Kabajeh et al, 2012 pp.115-120).
Marketing strategy and Positioning
The Real Life Insurance Company will use the strategy of product differentiation. In the
method the company will concentrates on its wide selection of services that are professionally
delivered by certified financial analysts (Englix, 2013 pp.16).
Positioning statements. Real Life Insurance Company is a complete service, free agency
and will offer a wide product and service selection. All the services will be derived on the client
desire and certified financial planning will be delivered. The product and services will be at low
pressure, professional and of the confidential environment (Cox and Quirk, 2010 pp.7).
Pricing strategy. Real Life insurance will widely utilize competition based pricing
method. In general, the pricing is will be based on the prices of the company's competitors which
will be standard and healthy for the insurance industry (Englix, 2013 pp.16).
Marketing mix (7P's)
In simple term, the marketing mix is a tool that is implemented by the businesses and
marketers to aid them determine the product and service offering (Wentzensen and Wacholder,
2013 pp.1-3). The 7Ps marketing mix is an update of 4Ps marketing mix the update was done
the late 70s which was due to broadly acknowledgment by markets that the marketing is required
to be updated. The mix is formulated to the organization's marketing goals by providing its
customers with value.
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The Real Life Insurance Company will widely deploy the marketing mix in defining the
value of services to its customers (Wentzensen and Wacholder, 2013 pp.1-3). With such
guidance in the insurance marketing sectors, the organization will observe on improved and
healthy market competition from its competitors. To balance the marketing sector, the
organization will equally be innovated on the 7Ps of the marketing mix. Such action will help the
real action insurance company withstand worse condition when the insurance market is low.
Product/services.
Real life insurance offers the following services.
 Insurance of Health
 Insurance of transport
 Vehicle insurance
 Insurance of Land
 Burial insurance
 Insurance due to Flooding
 Vacation homes property liability etc.
Price
As discussed the company will use competition based pricing method where the price of
the competitors will determine the price
Promotion
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Real Life Insurance Company is going to rely on the marketing blitz to deliver its
promotions. The company will also implement other types of promotion strategies such as online
promotions, use of televisions and radios, Facebook promotions and others (Wentzensen and
Wacholder, 2013 pp.1-3). The promotion will be highly considered, in the company, as it helps
in increasing the number of customers
People
To achieve the desired goal of the Real life insurance company, the company will invest
in deploying skilled individual who has worked on the insurance-related companies for a
specified duration. Such an action will ultimately favor the marketing environment of the
organization (Finch, 2013 pp.90).
Place
The location of every business defines the growth of that business. In simpler term, each
business should be accessible by its targeted customers (Finch, 2013 pp.90). The Real Life
Insurance Company will initiate many branches countrywide to reach out to its customers. Such
an innovation will attract a significant number of customers who were previously hindered by the
inaccessibility issue (Rummler and Brache, 2012 pp.88).
Process
The organization will implement a reliable and effective services providing process.The
organization will also introduce online registering services to give the clients a chance to register
in person before they visit the nearest Real Life insurance branch (Ghosh and Wu, 2012 pp.47-
64).
Physical evidence
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The real life will offer physical documents to all the clients for all the payments made, for
future references. This is because the soft copy evidence on the payments made by various
clients may be accidentally be deleted which would bring a lot of contradiction in the company
(Finch, 2013 pp.90).
Implementation of the business plan
The implementation of the business plan will rely on all the stakeholders of the
organization. Both the internal and external stakeholders will equally treated in the
implementation process of the business plan (Burns and Dewhurst, 2016 pp.4). The internal
stakeholder members include the investors and the workers of the organization. The external
stakeholder members are occupied by the customers and donors.To ensure that cooperation is
deployed in the implementation process the organization will formulate a team of board
members. All the investors will be officially included in the board while one of the worker will
represent the employees (Burns and Dewhurst, 2016 pp.4).
To allow the effective implementation of the plan of business the following is the
analysis of the financial plan (Frith, 2014 pp.4).
 The required cost to start up
 Financial plan Profit
 Financial plan of loss
 balance sheet of Cash flow
 ratios for the finance
Beneficial assumptions
Assumptions of Income
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 The summary of financial will follow a conservative direction toward revenues
 Assumed revenue and income will be obtained from three initial sources.
 Individual automatic: 15% commission on business (personal auto.)
 Homeowners and food insurance: 18% premium/$1000
 The remaining sources of revenue: 20% in premium
Expenses assumption
 1st Year -the owners are going to hire a bookkeeper and the income is expected to be
around $25000
 3rd Year: the company is expected to have administrative employees who will offer
services in full –time.

Balance sheet
Real Life Insurance Company anticipates having sufficient funds and stable equity
Position. The Company is expected to have fewer debts and well capitalized with a comparison
to peers with same sizes revenues and assets (Zacharakis et al, 2011 pp.80).
The organization is expected to have a better liquidity because it is evidenced by a current ratio
of 1.3 during 3rd year. The net worthy fund is predicted to be 31.58% at the end of the first year.
Conclusion
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Business plan act as the compass of every business. The business plan developed defines
various plans towards achieving a reliable insurance company (Zacharakis et al, 2011 pp.80).
The sector of insurance in the country have been experiencing a lot of innovation which has led
to increased competitive pressure among the competitors.to actively participate in the insurance
sector in the country, a strategized business plan is required. Such plans should be geared toward
making the marketing environment more favorable for your new business for you to cope up
with generated competition pressure. The launching process of the business also requires an
individual who has an extensive knowledge in the insurance sector (Stănculescu, 2010 pp.65).
Recommendations
For every organization to obtain a reliable business plan, a skilled person should be
implemented in the business planning process. Some organization implements unskilled
personnel which ends up ruining the whole business (Scarborough, 2016 pp.67).
Also, the organization should involve customer presentation in the planning processes of
the company. Customers can be physically presented on involved via questioning them using a
questionnaire (Scarborough, 2016 pp.67). This makes the organization determines the required
adjustments so that to achieve a high-quality service.
The organization management should initiate training programs among its employees.
This will boost the quality offered by the organization. By doing so the number of the customer
seeking services will increase.
Lastly, the introduced strategies should largely contribute to an improvement of services
offered rather than oppressing the customers. Some organization forgets that customers are the
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key determiner of the business existence ending up introducing rules that harass the clients. Such
action will only lead to the crushing of the business (Scarborough, 2016 pp.67).
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Appendix
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Figure 1: MARKETING MIX
Figure 2: START UP COSTS
25

Figure 3 :BALANCE SHEET
26