How does one start an insurance company?
I have an idea for an insurance company ina niche I feel is unexplored. I do not know the requirements and legal ramifications for starting an insurance company and would like some guidance in this area. Any help would be appreciated. Thank you.
You would need to ask the Department of Insurance in your particular state, because each state has differant legal and regulatory rules regarding the insurance business. I know you need to have enough reserve cash available to be able to pay claims and they have certain worst-case scenarios you have to be able to answer like – what if 10% of your insured suddenly had claims – could you pay??? I also know to sell insurance you have to have a licence and that you get that licence at the same place so check them out FIRST – I’m sure they can paint a picture for you. Also, check out www.score.org thats the Service Corps of Retired Execs. They are a SBA-affiliated nonprofit group that offer free start-up consulting nationwide. Good Luck.
September 30th, 2009 at 12:51 pm
I thought everything was insurable, including pets, etc.
You need a lot of capital to cover early losses before the premium payment receipts build up into a large reserve. Sometimes insurance companies start out by only taking the lowest risk insurees. You definitely need ways to determine risk in order to set rates. You need factual data on which to construct actuarial tables, and for that you need an actuary, and maybe a statistician. Without firm data and risk calculations, it seems unlikely you could get a loan or get past the regulatory hurdles.
References :
September 30th, 2009 at 1:24 pm
You would need to ask the Department of Insurance in your particular state, because each state has differant legal and regulatory rules regarding the insurance business. I know you need to have enough reserve cash available to be able to pay claims and they have certain worst-case scenarios you have to be able to answer like – what if 10% of your insured suddenly had claims – could you pay??? I also know to sell insurance you have to have a licence and that you get that licence at the same place so check them out FIRST – I’m sure they can paint a picture for you. Also, check out http://www.score.org thats the Service Corps of Retired Execs. They are a SBA-affiliated nonprofit group that offer free start-up consulting nationwide. Good Luck.
References :