Where am I? | Home Sample Business Plans Insurance Agency Business Plan - 5.0 Marketing Strategy and Implementation
Insurance Agency Business Plan - 5.0 Marketing Strategy and Implementation

Insurance Agency Business Plan

This sample Insurance Agency Business Plan is free for you to download and use as a basis for developing your own specific business plan.








If you like our free sample business plans please spread the word by telling your friends about us. We like to be Liked.

Insurance Agency Business Plan - 5.0 Marketing Strategy and Implementation
User Rating 3.14 ( 7 Votes )
Article Index
Insurance Agency Business Plan
2.0 Company Description
3.0 Products
4.0 Market Analysis
5.0 Marketing Strategy and Implementation
6.0 Organization and Management
7.0 Financial Plan
All Pages

5.0 Marketing Strategy and Implementation

With the opportunity to compete in a $4.7 million market, Convenient Insurance has outlined the following SWOT analysis:

5.1 SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities and threats. The following SWOT analysis identifies the internal and external factors that are favorable and unfavorable to Convenient Insurance’s objectives.

5.1.1 Strengths

  • The owners with collectively 20+ years experience have demonstrated the proven ability to run, manage and operate an insurance agency.
  • Convenient Insurance will be operated by trusted CFPs; No products will be sold unless they have passed the needs test.
  • As a Trusted Choice Independent Agency, Convenient Insurance will have over access to 100+ product offerings – enough to cover any insurance need at any life stage.

5.1.2 Weaknesses

  • Although the owners have years of industry experience, this is still considered a startup independent office. Start ups have little preferential treatment with vendors and higher overhead and costs.
  • Success is measured by policies underwritten; the owners will have time constraints initially due to limited staffing. Over time, they can build their office staff and revenues as well.

5.1.3 Opportunities

  • The local Woodlands Market has a wide variety of future opportunities; the target market has diverse demographics with varying needs and a strong local business market to draw from.
  • Partnering with or piggybacking off indirect competitors will provide business opportunity and meet unmet needs.

5.1.4 Threats

  • Economic downturns, regulations, changes in health care reform, and natural disasters all affect the insurance agency’s ability to keep premiums competitive. The recent drought of the summer, Hurricane Sandy, and the presidential election could potentially adversely impact the industry.
  • Technology is key; if Convenient Insurance does not use the latest technological advances, it could quickly slide, losing market share.

5.2 Strategy Pyramid

Strategy
Offer a broad range of products and service (in order to capture 2.3% market share.)

Tactics
Create awareness that Convenient Insurance is the newest and brightest entrant in the marketplace.

Programs
Marketing blitz both online and in the local community to spread the word.


Strategy
Convenient Insurance will be known for its honesty and integrity as an insurance provider /good citizen.

Tactics
Engage with online services such as Yelp.Com and MerchantCircle.Com – for candid and honest reviews of the products and services provided.

Programs
Actively engage with clients by requesting completion of surveys (both online and over the desk).
Attend customer service training classes.
Sponsor a local school sport - such as a soccer team.

Strategy
Grow customer base.

Tactics
Create an active pipeline.

Programs
Develop reciprocal relationship with complementary vendors; for example partner with the local motorcycle agent and offer free motorcycle safety seminars and offer complementary life insurance evaluations.

5.3 Unique Selling Proposition (USP)

Unlike its competitors, Convenient Insurance will strive to be the low pressure, insurance agency of choice. While it is no secret that insurance agencies make their living off commissions, the owners of Convenient Insurance have adopted their personal views and believe that honesty is the best policy.

The owners are taking their clients’ needs to the next level – by mandating each client be required to take a needs based exam to determine which needs are being met and which are not. This higher level of evaluation is unheard of and the owners of Convenient Insurance are honored to be able to provide what they believe is an invaluable service.

5.4 Competitive Edge

Convenient Insurance stands head and shoulders above its competitors with its broad product and service offering, need-based selling requirements, high tech interfaces and professionalism and integrity.

5.5 Marketing Strategy and Positioning

Convenient Insurance will utilize a product differentiation strategy. Through this type of strategy Convenient Insurance will focus its efforts on holding itself apart from its peers through its broad selection of products and services delivered professionally by Certified Financial Analysts. The agents will only sell services that are needs based. This will eliminate wasteful and (expensive) insurance products and the customer can feel comfortable knowing that his choice to purchase insurance was well worth it. (Unlike their peers, Convenient Insurance will avoid ‘scare’ tactics, which ‘scare’ customers into purchasing excessive, wasteful and expensive insurance products because an overly aggressive agent needed the policy to meet his monthly quota requirements).

5.5.1 Positioning Statement

Convenient Insurance is a full service, independent insurance agency, providing a broad selection of products and services, specifically tailored to the individual needs. All services are based on the individual clients needs and delivered by Certified Financial Planners – all in a low pressure, professional, confidential environment.

5.5.2 Pricing Strategy

Convenient Insurance will utilized competition based pricing – that is pricing based on competitor’s prices – which is standard for the insurance industry.

5.5.3 Promotion and Advertising Strategy

Convenient Insurance will rely on a marketing blitz to get the word out. The owners are members of the local chamber of commerce and will be hosting a grand opening chamber event. Other promotion strategies include:

  • Improve its Google rating by utilizing a media/marketing consulting firm to get Convenient Insurance’s name at the top of the major search engines.
  • Utilize the marketing agency to assist with telemarketing campaigns.
  • Purchase lead lists from local lenders.
  • Online Yellow Pages – Utilize this source to obtain business.
  • Utilize customer ranking websites such as Yelp.com and Merchantcircle.com.
  • Word of mouth – Convenient Insurance loves referrals and will always request referrals.
  • Onsite promotions:
  • Convenient Insurance will sponsor windshield etching events – where the VIN number of a vehicle is etched into the glass on a car. (This reduces auto theft).
  • Collaborate with the local Safety Institute and offer free Baby Seat and Child Safety Seat inspections.
  • Drop off donuts / bagels to apartment managers (renters insurance).
  • From time to time offer free seminars with a focus on health insurance needs, retirement needs, and financial goals.

5.5.4 Website

The website will have the Convenient Insurance address and business hours as well as links to Trusted Choice carriers, daily blogs, and social media including Facebook (personal lines) and LinkedIn (business lines). Customer will have the ability to view their policies, submit questions, and make payments. Weekly/monthly the website will be updated with current insurance news and media links. Customers will be sent surveys/polls for opportunities for constant contact and open the lines of communication.

5.5.5 Marketing Programs

Initially Convenient Insurance will rely largely on its IIAT’s connections. However, marketing is the primary method to solicit new business and Convenient Insurance will rely on its marketing/media consultants to help with the initial marketing blitz. The local campaign (Chamber of Commerce grand opening) and the online blitz (it is expected that Convenient Insurance website will be linked to the top 40 search engines) will be the ideal way to start off the campaign.

In the local community, Convenient Insurance will host semi-annual sponsored events – such as the VIN etching days and safety seat inspections. In addition their commitment to the community will be evidenced by their corporate sponsorship of a local school sports team.

5.6 Sales Strategy

Convenient Insurance has plans to grow revenues 10% in Year 2 and 10% in Year 3. These goals will be met by increases in volume. Additionally volumes are expected to increase with the additions of staff.

The three year hurdle is the minimum requirement prior to being considered for direct appointment. The three year window will demonstrate Convenient Insurance’s proven abilities to run and operate the business. The window will establish a payment and credit history as well. Note: The online business, while appealing, is secondary to the brick and mortar business; the business plan takes a more conservative approach and those incomes have been excluded from the analysis. After the initial 3 years of operations, Convenient Insurance will re-visit this opportunity and possibly include this line item in their financial goals and planning.

5.6.1 Sales Forecast

The financial analysis takes a conservative approach to revenues and assumes revenue and income streams will be derived from 3 primary resources:

  • Personal Auto: 12-15% Commission on New Business, 10-15% on Renewals (say 14% premium per $1,000 in coverage),
  • Homeowners & Flood Insurance: 12-20% (say 18% premium per $1,000 in coverage)
  • All other sources of revenue (health, business insurance, life and renewals) (Say 20% in premium).

This rational is used for two reasons: 1) more conservative and 2) while life insurance, annuities and business lines offer greater premiums, these are the most difficult to attain. The analysis assumes an income growth rate of 10% in Year 2 and 10% in Year 3. The analysis assumes the new agent ramps up revenue, earning 50% by Year 2 and full income streams by Year 3.

Insurance Agency Annual Sales Forecast

Table 5.6.1 Annual Sales Forecast

5.6.2 Sales Programs

As insurance agents, the staff at Convenient Insurance works on commissions. Following are approximate commission amounts for each of the different insurance products:

  • Personal Auto: 12-15% Commission on New Business, 10-15% on Renewals
  • Health Insurance: 15-20% Commission on New Business, 10-20% on Renewals
  • Commercial Insurance: 12-20% Commission on New Business, 10-20% on Renewals
  • Life Insurance: 80-120% Commission on New Business, 2-10% on Renewals
  • Homeowners & Flood Insurance: 12-20%
  • Commission on New Business 12-20% on Renewals

5.7 Legal

Convenient Insurance has obtained legal advice to make sure that they are not in any violation of any non-compete or any contractually related issues (based on the owners’ history with Mutual of Texas and State Barn). Convenient Insurance was formed as a Limited Liability Company (LLC) in the State of Texas. The entity is wholly owned by its owners Greg and Maria Bell.

Convenient Insurance is registered business with the county and the state. Convenient Insurance has obtained its Federal Identification Number (EIN). Convenient Insurance has also obtained an Insurance Agency License with the state and its Certificate of Good Standing the State.

5.8 Milestones

Please refer to the Chart Below:

Insurance Agency Milestones

Table 5.8 Milestones

5.9 Exit Strategy

Initial debt recourse will first be to Greg and Maria Bell as personal guarantors, the secondary source will be recourse to collateral and tertiary recourse will be the sale and disposal of assets. In the event the company is to be dissolved, all assets will be liquidated. Physical assets will be sold at auction and all policies will rollback to Convenient Insurance’s various independent providers.



 

Newsletter Sign Up


Sign up to receive occasional newsletters from Fast Business Plans. Registration will ensure you're notified of new sample business plans and templates as they become available. We do not spam or share your email address with others.

*


Copyright © 2012 The Corporation, Inc.
Mark Piscopo