Start an Insurance Company

What are the licenses needed to start an insurance company? How much do they usually cost? What qualifications does one need to start a business selling insurances? What other ways can one own an insurance company aside from starting it from scratch? These questions will be answered by our basic guide.

Do you think selling insurance is a good business? Are you wondering what you need and what it takes to set up your own insurance company?

Insurance Company Licenses Requirement

You need a license to be an insurance agent. You can secure that by passing several state examinations. But since running an insurance company is a complicated business, you must have considerable experience working in the insurance business before considering you are better off working for your own company rather than under someone else’s as an agent or broker.

Aside from a license as an agent, the company must secure an insurance license itself in order to operate. Every jurisdiction has a minimum liquid asset requirement for an applicant to qualify for an insurance license. The amount is usually in the million-dollar mark. Insurance companies usually operate in more than one state. As such, you need to decide which states to operate and to secure a license for each state. The more populated a state is, the higher the cost of securing a license for that state. A license costs more than $100,000 on average.

You will also need a corporate license. Aside from an insurance license, your company will also need a license as a business entity and be registered in your city or incorporated with a state. Work with an attorney in order to establish the legal presence of your insurance company. Seek their advice regarding permits and requirements for starting a business.

Insurance Company Funding Needs

Because of licenses and minimum liquid asset requirements, an insurance business requires large funding to start. These are on top of what you have to spend for other startup costs, like the rent of your office, the purchase of furniture and computers, and the cost of creating a Web site to establish an online presence. Some sells stocks to get investors for the business.

Because of the need for a considerable capital to start an insurance company, and because of the licenses requirements, among others, opening an insurance company requires a lot of paperwork and considerable time. If setting up your own insurance company sounds too much work, you can also purchase a shell insurance company. Purchasing one will spare you with the hassles of securing licenses, although the number of licenses a shell company have will still factor on the total price of the purchase. Still, another way of starting an insurance business is by buying a franchise, which, however, could cost more.
 

24 Comments

  • MAC BIYELA said on May 18, 2009
    I want to start an insurance company, where do I start?
  • marina diaz said on November 3, 2009
    I live in yoakum TX 77995
  • Jim Jackson said on January 25, 2010
    I want to do business in Los Angeles, Ca.. This also something I need to do now. Please contact me a.s.a.p.
  • Daryl Yow said on January 27, 2010
    I would like to learn how to start my own insurance company out here in American Samoa. I would like to deal with Medical first and then expand. i do not know where to start...
  • TOMIKA CALLOWAY said on March 28, 2010
    I LIVE IN ARKANSAS AND WOULD LIKE TO KNOW WHAT DO I NEED TO CONCENTRATE ON FIRST TO START A LIFE INSURANCE COMPANY IN TENNESSEE AND OR ARKANSAS
  • Bill Wise said on April 5, 2010
    I want to learn how to start an insurance company. I have no background in insurance.
  • George said on April 26, 2010
    I live in Las Vegas. I can help you start/run a life or casualty insurance company. Write to me at george9360@earthlink.net.
  • sergey said on August 3, 2010
    i am seriously looking forward to start my own insurance company in Tacoma Wa, US. serioshkad@hotmail.com
  • Job Gandawa said on February 26, 2011
    I am in Harare,Zimbabwe. I need to start an insurance business that will be operating internationally to foreign nationals. I need leads on how to start such a company
  • Trinity Malu said on February 14, 2012
    I am looking in to starting an insurance business, I have experience and know all of what is needed to be done. But I am not sure of where to get help on the financial needs for the machinery and office equipments. Please help!!!!
  • tendayi said on October 19, 2012
    i want to start an insurance company in Harare the capital city of Zimbabwe and i need an investor
  • Aman Bahia said on November 30, 2012
    I would like to start an insurance company in the bay area. Can you help me start it up. I would like to sell insurance for autos and trucks. Thanks
  • kelvin said on August 16, 2013
    Hie I want to open a short term insurance company in Zimbabwe, (southern africa). I have experience in sourcing clients and writing business. How do I go about it and which qualifications do I need to have?.
  • david kyalo said on November 1, 2013
    i want to start a phone insurance company specifically in kenya how do i go about it?
  • Akbar Noorani said on March 5, 2014
    I want to start Property and Casualty Insurance company and want to buy shell Insurance company can suggest how and where to start
  • thabng jonase said on June 4, 2014
    i want to start the insurance company but i have no experience of insurance. i have only the concept of what type of business i want and little understanding
  • C. G. said on June 19, 2014
    My grandfather has his own insurance business. My aunt has poisoned him against me and stole my inheritance for herself and it's useless kids. That being said, I'm starting my own insurance company.
  • Effort said on July 28, 2015
    I want to start an insurance company in Zimbabwe Masvingo. I dont know where and how to register, pliz help
  • Nick said on August 21, 2015
    I am starting an insurance company and years of experience running multiple successful agencies. I have maintained relationships with brokers willing to sell my product. I also have a relationship with a venture capital firm willing to invest after I do all the legwork. What I need is someone that can help me with the paperwork and filings and I can handle the rest. I'm willing to join a company that needs an educated, ambitious insurance man with contacts to start a successful company. I have done all of the paperwork that I am capable of for ex. The business plan, Biography and more but I am searching for advisement from someone that had done it before or from a law firm that specializes in this. My business plan is very strong and concentrates on taking low risks with strong contractual agreements.
  • mogari said on October 3, 2015
    I want to start my own insurance company based on personal possessions in south africa where do I start?
  • Jeannette said on January 27, 2016
    I would like to start an insurance company. am in Nairobi, Kenya. can you please guide me?
  • Brian said on June 6, 2016
    I need to start up my own insurance company in Zimbabwe. I would appreciate your input especially on the procedures. I have vast experience with the Insurance companies at managerial level. I am very passionate about this venture.
  • Keyur Bhatt said on April 13, 2017
    I am looking in to starting an insurance business in India, I have experience and know all of what is needed to be done. But I need financial support for legality and licensing etc. we will launch best product in General insurance. Please help!
  • SYDNEY NERAL said on October 16, 2017
    i need to start more of insurance company which consists of legal, life, hospital e.t.c how do i start this company

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