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How do you start an insurance company?

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Most small insurance companies are independent insurance agents who set up a storefront of their own. First you'll need to be an insurance agent. That generally means getting licensed. The "insurance company" side of it would be pretty much like any other retail business. You'll need to be an entrepreneur and learn the basics of all sorts of business management tasks: accounting, marketing, managing staff, etc. Here are more opinions and answers from other FAQ Farmers:
  • The obvious is always simple, but the question of "how do you start an insurance company" is far more complex than accounting, marketing, managing staff, etc. Before you can even consider these aspects of the question you must first have the legal ability to sell products under your own company name. And I don't mean "agent licenses or agent/brokers licenses", which are easily obtainable from any of the 50 states by paying a small fee and taking a simple test. I mean a corporate insurance license that specifically gives "your company" the legal right to sell insurance and financial services products to the general public of a given jurisdiction under "your company name". This requires capital. Minimum of 1,000,000 for starters and in a lot of jurisdictions $5,000,000- $30,000,000 is the norm. Also, be wary of the "cheap" 100,000 dollar type offered by some jurisdictions because if you end up with a hundred thousand dollar piece of worthless paper. What are you going to do with it? Frame It? Moreover, the figures above do not include "start-up" costs for infrastructure, advertising, staffing, training, product implementation and/or creation, etc. The licensing fees are over-and-above these other incidental costs. And generally require liquidity of the entire amount or a letter of credit from a credible bank backing the required amount unequivocally in case of default. Which means, you must have tangible assets in excess of the amount guaranteed by the financial institution in order to secure the letter of credit against the license.
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