Do you want to start a pet insurance company? If YES, here is a complete guide to starting a pet insurance business with NO money and no experience.
Okay, so we have provided you an in-depth sample pet insurance business plan template. We also took it further by analyzing and drafting a sample pet insurance marketing plan backed up by actionable guerrilla marketing ideas for pet insurance companies. In this article, we will be considering all the requirements for starting a pet insurance business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Why Start a Pet Insurance Company?
- Starting a Pet Insurance Company – Market Research and Feasibility Studies
- Starting a Pet Insurance Company – Legal Matters
- Is Professional Certification Needed to Run a Pet Insurance Company?
- Starting a Pet Insurance Company – Technical and Manpower Details
- Starting a Pet Insurance Company – The Marketing Plan
Why Start a Pet Insurance Company?
The insurance sector all over the world has been adjudged a money spinner. This is one of the reasons why more and more people are delving into the industry to have a share of the dividends there. If you are looking for a business to start as an entrepreneur and you know you have an interest in the insurance industry, then you should consider starting your own pet insurance business.
If you are considering starting a pet insurance company, then you would be required to get an insurance license from the organization regulating the insurance industry in your country before you are permitted to start your own pet insurance company. In the united states of America, it is the National Association of Insurance Commissioners that regulates the industry.
Believe it or not, pet owners who truly love and cherish their pets can pay huge amounts of cash to insure their pets, hence the need for pet insurance companies. Starting a pet insurance company is like starting any other insurance company. You would be required to get an insurance license from the organization regulating the insurance industry in your country before you are permitted to start your own insurance company.
The process of obtaining an insurance license might not come easy, but this is depending on the part of the world you live in. Any applicant for insurance license would be required to meet certain laid down criteria and sometimes it is the bureaucracy involved in the whole process that makes it difficult to obtain.
Consequently, it is important to state that starting a pet insurance company requires hard work, time, money and dedication from the starting stage through the process of running the business. However, if you are already a player in the insurance industry with a handful of experience, it might be much easier for you to start your own pet insurance company.
Just like most business, the insurance industry is open to as many people that are interested in the industry as long as you have what it takes to run an insurance firm. Even if you don’t have the finance and other requirements for starting an insurance company, you can come into the industry by starting out as an accredited insurance broker.
So, if you want to start your own pet insurance business, all you need do is to read this article and you will be well equipped.
Starting a Pet Insurance Company – A Complete Guide
- Industry Overview
The insurance industry is wide and global in nature; there are numerous aspects anyone interested in starting an insurance company can choose to specialize in. For instance; in the United States of America and even in Canada, pet insurance is one aspect of insurance that is gradually opening up and it is interesting to state that it is a very promising market.
Anyone looking towards starting an insurance company has to choose an area of insurance to specialize in or they could choose to start a general insurance company; an insurance company that is involved in the selling of life insurance policy, pet insurance policy, health insurance policy, auto/car insurance policy and liability insurance amongst others.
The United States of America has the largest insurance market in the world as indicated by the volume of premium payments. Statistics show that in 2013 alone, out of the total sum of 4.640 trillion US dollars of gross premiums written on a global scale, 1.274 trillion US dollars which translate to 27% were actually written in the United States of America. This goes to show how big the insurance industry is in the United States of America.
In a report released by McKinsey & Company, it was estimated that the insurance industry in the United States incurs about 13 billion US dollars annually in unnecessary regulatory costs under the state-based regulatory system
In the insurance industry, it is only the smallest insurers that exist as Single Corporation. It is the practice in the insurance industry for most major insurance companies to exist as insurance groups; they usually partner with holding companies. This practice has loads of benefits and as a matter of fact insurance groups are known to survive the turbulence in the insurance industry year after year and the survivability of single insurance companies is pretty low.
In some countries, trust is one of the key factors that is hampering growth of the insurance industry. Beyond that, the insurance company is still growing and as long as the economy of the country continuous to grow; the insurance company will usually tag along.
The fact that there are several insurance companies and insurance brokerage firms does not in any way stop an investor or entrepreneur who wants to venture into the insurance industry. If you know what you want and you have the right strategy, you will definitely make good success out of the insurance industry.
People are encouraged and motivated to venture into the insurance industry because of the profitability of the industry, and also because despite the fact that the industry is saturated, there is still room to create your own unique insurance products or even partner with bigger insurance companies if you are able to successfully build your own insurance company to a certain success level.
It is also important to state that if you are an investor who is interested in owning a portfolio in the insurance industry, you may not need to go all the way to write and pass the required insurance exams and obtain the necessary insurance certifications. All you need to do is to provide the finance and connections needed and then get people who have the required paper/documents to partner with you in starting your insurance company.
If you have successfully put in place all that is expected of you to be able to establish your own pet insurance company, then you should launch out and start selling your pet insurance policy. Some of the first steps you might need to take is to approach vet clinics to let them know that you sell insurance cover, they are likely to link you with pet owners or provide you with a number of pet owners you can market your pet insurance cover to. You can as well visit parks where you are likely to see pet owners to market your pet insurance cover to.
No doubt, the pet insurance business is one of the aspects of insurance that requires loads of effort to make tangible sales; this is especially if you are in an area where the concept is still very much new. However, the fact remains that it is a very lucrative business too, if you know how to go about it.
Lastly, the pet insurance industry is open to as many people that are interested in the industry as long as you have what it takes to run an insurance firm. Even if you don’t have the finance and other requirements for starting a pet insurance company, you can come into the industry by starting out as an accredited pet insurance broker.
Starting a Pet Insurance Company – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize pet insurance policy covers cut across all genders. They include male and female above 18 years with the financial means, and organizations who own pets hence the demographic composition for pet insurance business is all encompassing. In essence, your target market can’t be restricted to just a group of people, but all those who own pets.
So, if you are thinking of launching your own pet insurance company then you should make your target demographics all encompassing. It should include the public sector, government ministries, agencies and parastatals, organized private sector, households, security companies, military, police and every organization that owns dogs and other pets within the location where your company is located.
List of Niche ideas Within the Pet Insurance Industry That You Can Specialize in
It is important to state that there is no known niche area when it comes to pet insurance business; pet insurance is a niche area in the insurance industry. Every player in this line of business directly engages in underwriting pet insurance.
The Level of Competition in the Pet Insurance Industry
The competition that exists in the pet insurance industry go beyond competition with pet insurance companies; you will be expected to compete with other insurance companies that also sell pet insurance policy covers. So, it will be right to say the competition in the pet insurance line of business is tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure your premiums are affordable, you pay claims as at when due without much stress and you know how to attract and reach out to your target market.
But over and above, there are several pet insurance companies scattered all around the United States. So, if you choose to start your own pet insurance company in the United States, you will definitely meet stiff competitions amongst pet insurance companies and insurance companies within your business location that also sell pet insurance policy cover. Besides, there are larger pet insurance companies that determine the trends in the industry and you should be ready to compete with them for customers.
List of Well – Known Brands in the Pet Insurance Industry
In every industry, there are always brands that out-perform others. Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading pet insurance companies and insurance companies that also sell pet insurance policies in the United States of America and in the globe;
- Embrace Pet Insurance Company
- Petplan Pet Insurance – North America
- Pets Best Insurance Company
- Pet First Pet Insurance Company
- AKC Pet Insurance Company
- Nationwide Pet Insurance Company
- Trupanion, medical insurance for cats and dogs
- Figo Pet Insurance Company
- Healthy Paws Insurance – Gerald Mann
- American Pet Insurance Company (APIC)
- ASPCA Pet Health Insurance Company
- Pet Premium® Pet Health Insurance Company
- 24 Pet Watch Pet Insurance Company
If you are looking towards successfully launching a business and maximizing profit, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
The pet insurance business might be considered a Green business, but in recent time, you will come across several pet insurance companies or insurance companies that sell pet insurance policy covers when you drive through town or search both online and offline directories.
So, if you are mapping out your economic and cost analysis, you should carry out a thorough market survey and costing of the amount needed to rent an office facility, furnish the office, build software apps and the amount needed as capitalization fund, the amount needed to acquire the required business licenses and also the running cost to successfully run the business.
By and large, if you are considering starting a pet insurance company, then your concern should not be limited to the cost of renting an office facility et al, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in your pet insurance business.
Starting Your Pet Insurance Business from Scratch vs Buying a Franchise
If you are looking towards starting a pet insurance company, you would have to start from the very scratch because you can hardly get a franchise of a pet insurance company to buy except you want to partner with an established insurance company.
Besides, starting a pet insurance company especially a pet insurance brokerage agency from the scratch is less stressful when compared to other related businesses which usually require detailed groundwork before launching the business. With a pet insurance company, you should just try as much as possible to secure a standard office facility in a good business district and then leverage on every marketing tool within your disposal to market your pet insurance company.
Please note that most of the big and successful pet insurance companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
Possible Threats and Challenges You Will Face When Starting a Pet Insurance Company
If you decide to start your own pet insurance company today, one of the major challenges you are likely going to face is the presence of well – established pet insurance companies and insurance companies that also sell pet insurance policy covers within your business location. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face are economic downturn and unfavorable government policies. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
Starting a Pet Insurance Company – Legal Matters
- Best legal entity to use for this type of business
You have the option of either choosing a general partnership or limited liability Company for a pet insurance company. Ordinarily, general partnership should have been the ideal business structure for a small – scale pet insurance company especially if you are just starting out with a moderate startup capital in a small neighborhood.
But if your intention is to grow the business and start selling your pet insurance policy covers in major cities all across the United States of America and other countries of the world via franchising, then Limited Liability Company, LLC is what you need.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder’s meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your pet insurance company; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your pet insurance company with the ability to sell franchise and sell your pet insurance policy covers all across major cities in the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Catchy Business Name ideas Suitable for a Pet Insurance Company
When it comes to Choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own pet insurance company, here are some catchy names that you can choose from;
- Decoster Martins® Pet Insurance Company, Inc.
- Las Tandy® Pet Insurance Company, LLC
- GT Network™ Pet Insurance Company, Inc.
- All Pets® Pet Insurance Company, LLC
- Bernard Kenwood Group® Pet Insurance Company, Inc.
- Colby Clan® Pet Insurance Company, Inc.
- The Animal People™ Pet Assurance Company, Inc.
- The Saints® Pet Insurance Company, LLC
- Sum Assured® Pet Insurance Company, Inc.
- Mutual Benefits® Pet Insurance Company, Inc.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your pet insurance company.
Some of the basic insurance covers that you should consider purchasing if you want to start your own pet insurance company in the United States of America include;
- General insurance
- Risk Insurance
- Credit insurance
- Deposit insurance
- Financial reinsurance
- Lenders mortgage insurance
- Health insurance
- Liability insurance
- Comprehensive Motor Vehicle Insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
Opening an insurance company is a serious business which is why you must do all that has to be done and one of the things you need to do is file for intellectual property protection. This is necessary because you must ensure that you company’s logo and every other official document like pet insurance policy document and claims related documents are well protected to guide against people taking advantage of your business.
So also, you may want to develop your own customized pet insurance software applications; if you happen to develop your own customized software application, then by all means you would need to apply for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
Lastly, there may be need for you to also develop unique pet insurance products for your clientele base. The fact that there is stiff competition in the pet insurance industry requires that you protect your brain child or else others will leverage on it.
Is Professional Certification Needed to Run a Pet Insurance Company?
Aside from the results you yield as it relates to paying claims as at when due, professional certification is one of the main reasons why some pet insurance companies stand out. If you want to make an impact in the pet insurance industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in the competitive market.
These are some of the certifications you can work towards achieving if you want to run your own pet insurance company;
- Certified Insurance Counselors (CIC)
- Associate in Claims (AIC)
- Associate in Insurance Services (AIS)
- Associate in Personal Insurance (API)
- Accredited Advisor in Insurance (AAI)
Please note that if you are an investor who is interested in owning a portfolio in the insurance industry, you may not need to go all the way to write and pass the required insurance exams and obtain the necessary insurance certifications. All you need to do is to provide the finance and connections needed and then get people who have the required paper/documents to partner with in starting your pet insurance company.
List of Legal Documents You Need to Run a Pet Insurance Company
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long arm of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your pet insurance company in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Proof of ownership, proper identification and vehicle license
- Fire certificate
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
Financing Your Pet Insurance Company
Starting a pet insurance company can be cost effective especially if you choose to start on a small scale as a pet insurance brokerage agency. Renting an office facility, furnishing the office, building software apps, the amount needed as capitalization fund and the amount needed to acquire the required business licenses, are part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale with over a dozen full-time employees, you would need to go source for fund to finance the business because it is expensive to start a standard large scale pet insurance company.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your pet insurance company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
Choosing a Suitable Location for a Pet Insurance Company
Insurance companies and most financial services based type of businesses require that you see physically with your clients hence it must be located in good location; a location that is prone to both human and vehicular traffic and a location that is at the epicenter of a business district if indeed you want to attend to loads of clients and maximize profit from the business.
It cannot be overemphasized that the location you chose to open your pet insurance company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses who own pets and with the required purchasing power and lifestyle.
Most importantly, before choosing a location for your pet insurance company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out. This is the reason why it is very important to gather as much facts and figures before choosing a location to set up your own pet insurance company.
These are some of the key factors that you should consider before choosing a location for your pet insurance company;
- The demography of the location as it relates to the number of pet owners
- The demand for pet insurance policy covers in the location
- The purchasing power of the residents of the location
- Accessibility of the location
- The number of pet insurance companies and insurance companies that also sell pet insurance policy covers in the location
- The local laws and regulations in the community/state
- Traffic, parking and security
Starting a Pet Insurance Company – Technical and Manpower Details
If you are considering starting a pet insurance company, then you should look towards hiring ICT experts to help you develop your own unique insurance related software application, getting a secured internet platform and an online payment system. You will also need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of an office facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard pet insurance company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Risk Manager, Underwriters, Claims Investigators, Sales and Marketing Officer/Sales Girls and Sales Boys, Accounting Clerk and Customer Service Executive.
These are some of the key employees that you can work with. You may need 10 full time staff to start a pet insurance brokerage firm, but if you are looking towards starting a small scale but standard pet insurance company, then you should make provision for well over 10 full time employees that will help you man key roles in your organization.
The Business Services Process Involved in a Pet Insurance Company
Basically, a pet insurance company lists the policy covers that they have and then go out there to market the policy covers; that is modalities on how to regularly collect premiums and also pay claims as at when due after due claims investigation has been conducted.
It is important to state that a pet insurance company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated pet insurance company business process is not cast on stone.
Starting a Pet Insurance Company – The Marketing Plan
- Marketing ideas and strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a pet insurance company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands determining the market direction for the pet insurance industry.
Pet owners will purchase your pet insurance policy cover from you if they know that they are going to get claims as at when due (premiums).
As a matter of fact, your marketing strategy will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service. You should ensure that whenever your customers purchase your pet insurance policy cover, they will get excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet, which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort will be directed to internet users; your website will become your number one marketing tool.
These are some of the marketing ideas and strategies that you can adopt for your pet insurance company;
- Introduce your pet insurance company by sending introductory letters alongside your brochure to government ministries, agencies and parastatals, organized private sector, households, security companies, military, police and every organization that own dogs and other key stakeholders throughout the city where your pet insurance company is located
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs can know who to call when they need to buy pet insurance policy cover within your location
- Create a basic website for your business so as to give your business an online presence
- Directly market your pet insurance policy cover
- Engage in roadshows in targeted communities from time to time to promote your pet insurance company
- Join local pet insurance associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
Strategies to Boost Your Pet Insurance Brand Awareness and Create Your Corporate Identity
If your intention of starting a pet insurance company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by selling your pet insurance policy covers all across the United States, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is a dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your pet insurance company;
- Place adverts on both print (newspapers and pet magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your billboards in strategic locations all around highways and major roads in your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your pet insurance company
- Distribute your fliers and handbills in target areas
- Contact government ministries, agencies and parastatals, organized private sector, households, security companies, military, police and every organization that own dogs and other key stakeholders throughout the city where your pet insurance company is located informing them about your business and the insurance products you sell
- List your pet insurance company in local directories
- Advertise your pet insurance companies in your official website and employ strategies that will help you pull traffic to the site
- Position our Flexi Banners at strategic positions in the location where your pet insurance is located
- Ensure that all your staff members wear your branded shirts and all your vehicles and vans are well branded with your company logo et al.