Business plan for Jade Insurance in Australia

Small Medium Enterprise Set Up

Mission statement

Business goals

Marketing

Market research (location and size of market)

Market segmentation (which segments will you target)

Marketing plan

Products/services and target market(s)

Placement

Promotions and advertising

Pricing policy

Evaluation of marketing

Operations

Legal and licensing requirements

Organisational structure and staffing

Insurance and security issues

Business premises

Equipment required

Production process

Critical risks/contingency plans

Financial projections

Capital expenditure forecast

Sales forecast

Cash flow forecast

Projected profit and loss statement

Owner's personal expenses (continued on next page)

Environmental responsibility and Eco-sustainability

Implementation timetable

Conclusions and future directions

Executive Summary

Business Plan Structure

The business plan will focus on establishing a new kind of insurance company in Australia called Jade Insurance. Their basic goals are to offer clients with low cost solutions, better service and more personal attention on host of products. This will be achieved through working with local and overseas carriers. The idea is to meet all of the customer's needs for coverage without dramatically increasing their overall expenses. This will reduce the negative impact on the client, their family and the community by offering them with added amounts of protection. The company will serve as a private carrier and as an intermediary from reinsurers to consumers. (Insurance Facts and Figures 2012) (Underinsurance Statistics 2013) (Anderson 2009) (Kinder 2002)

This is addressing a need, with most Australians lacking adequate insurance protection. Evidence of this can be seen with observations from Investment and Financial Services Association of Australia. They found that most people are under insured and risk the possibility of facing significant challenges from a catastrophic event. According to the report, there are a various issues impacting the public with it saying, "Australia is one of the few developed nations in the world that is highly underinsured. In fact, Australian underinsurance is being seen as a grave matter even by the Australian government as it could cost the government billions of dollars in the forthcoming years. If Australians do not have adequate insurance in place in terms of life insurance, disability insurance, health insurance, and even income protection insurance, then the financial burden that arises from a serious illness or an unfortunate accident can cause severe hardships that the average family may not be able to survive. It is estimated that at least 20% of the Australian population between the ages of 21 and 64 will suffer some unfortunate event in their lives that will leave them incapable of working. Those with dependents were under-insured by $1.37 trillion. Simply put, only 4% of our population that has children have a sufficient amount of insurance. This places them at a substantial risk in the event of an unfortunate incident or accident." These conclusion are showing how there is the need for these products and services. (Insurance Facts and Figures 2012) (Underinsurance Statistics 2013) (Anderson 2009) (Kinder 2002)

Mission Statement

Jade Insurance is focusing on offering consumers with competitively priced insurance products for a fraction of the cost of other carriers. At the same time, they will work with numerous insurance companies throughout Australia and around the world to locate the best services. This will offer clients with more protection in the areas of life, retirement, property and planning. The larger selection of choices, allows agents to locate the right solutions in achieving the customer's overall objectives. This is when the firm will transform the marketplace through providing value and better service. (Insurance Facts and Figures 2012) (Underinsurance Statistics 2013) (Anderson 2009) (Kinder 2002)

Business Goals

There are a number of goals the firm will concentrate on. This will take place over the short and longer term time frames. In the case of short-term objectives, there are several areas the company must aggressively peruse. These include:

Building a diverse client base.

Offering customers with competitive solutions.

Working with stakeholders to create win -- win scenarios for everyone.

Increasing the profit margins of the organization by at least 25%.

Adding to the total number of customers the company is serving.

Motivating employees about the long-term benefits they will receive from their affiliation with Jade Insurance.

Establishing offices in areas that will attract local cliental tell who are seeking one on one service.

Utilizing traditional and online media to build the brand image of the firm. (Insurance Facts and Figures 2012) (Underinsurance Statistics 2013) (Anderson 2009) (Kinder 2002)

While the longer term goals of the firm include:

Creating new solutions to more effectively address the needs of customers.

Building strategic alliances with competitors to improve regulation and transparency.

Working with Australian and overseas regulators to create a universal structure that can be used for the industry worldwide.

Enhancing the ability of regulators to identify and deal with critical challenges early.

Evolving with the changing needs of customers through offering new products that have added flexibility.

Establishing strong working relationships with stakeholders via effective communication, collaboration, teamwork and innovation.

Creating an atmosphere of professionalism that will support the interests of employees.

Encouraging everyone to give something back to the communities they live in through volunteer service in numerous public works related projects.

Establishing strong multi-generational relationships with customers.

Enhancing capital reserves beyond regulatory guidelines.

Ensuring everyone is following the highest ethical standards. (Insurance Facts and Figures 2012) (Underinsurance Statistics 2013) (Anderson 2009) (Kinder 2002)

These objectives will help the company to redefine the way insurance products are sold to customers and the kind of rapport that exists with employees. It is at this point, when the firm's brand awareness will dramatically improve. (Insurance Facts and Figures 2012) (Underinsurance Statistics 2013) (Anderson 2009) (Kinder 2002)

Marketing

The marketing strategy will concentrate on taking a more nationalized approach. This will occur through establishing the image of the firm on this level in order to enhance brand awareness. At the same time, the company will use local resources to create a personalized one on one relationship with customers. The combination of these factors will work together to attract clients from various demographics. It is at this point, when the firm can address their needs and offer greater levels of protection to a larger demographic of consumers. (Insurance Facts and Figures 2012) (Underinsurance Statistics 2013) (Anderson 2009) (Kinder 2002)

Market Research

The insurance market in Australia is current valued at $58 billion. There are a total of 25 providers. They employ 21,860 people. The annual growth for the sector is 4.5%. This represents a small segment of the population who will need these services in the future. According to the Australian Prudential Regulation Authority, the marketplace is expected to grow exponentially within the next few years with them saying, "The insurance industry in Australia has undergone a paradigm shift in regulations and operating environment over the past few years. The growth in the insurance market has been aided by both an expanding economy and population level that have grown from 15.6 million in 1985 to 22.6 million in 2012. It has evolved in the past few years with the improvement in the financial regulation of the country. The market is expected to grow at a CAGR of 9.1% from FY'2013-FY'2016. The growth in the market will be promoted by the improving economic growth, rising population, surging automobile sales and increasing trend of online selling. Rising online selling with the increasing internet users and surging sales of Superannuation Guarantee insurance are expected to drive Australia insurance market positively in the next four years." (Insurance Facts and Figures 2012) (Market Presentation 2013) (Anderson 2009) (Kinder 2002)

This is showing how the insurance industry has evolved to the point where there is the need for numerous products. Part of the reason why this is occurring is from: improved regulations and the ability of firms to offer cliental with some kind of guarantees. This takes place through the strong fiscal position of the numerous carriers they are working with. In the next several years, this will result in more people seeking out these services to reduce their risks and enhance protection. (Insurance Facts and Figures 2012) (Market Presentation 2013) (Anderson 2009) (Kinder 2002)

At the same time, many customers are turning to direct providers who can sell them a host of products. This means that the marketplace is changing. The biggest challenge is most carriers have not been able to become a hybrid of these models. Jade Insurance will utilize the combination of them to create an all encompassing strategy. (Insurance Facts and Figures 2012) (Market Presentation 2013) (Anderson 2009) (Kinder 2002)

Market Segmentation

The segment that will be targeted is those individuals who range from 18 to 85. Inside the different categories, are specific areas where there will be a need for a variety of life insurance and retirement products. The most notable include: those who are building for the future, wanting to create an estate (i.e. legacy) and people who require additional sources of income. These products will help customers to build and plan for any events. This is the point, when they will be better prepared for a host of unforeseen and anticipated challenges. (Insurance Facts and Figures 2012) (Market Presentation 2013) (English 2009) (Anderson 2009) (Kinder 2002)

At the same time, the company will focus on reaching out to the affluent and helping them to address their issues. This will occur in areas such as: estate planning, creating strategies to protect their wealth / diversify their assets and keeping up with the changing needs in their lives. The firm will also target those individuals who are from middle class backgrounds. They can use the different products to protect their families, save for college / retirement, build an estate and establish different forms of income. This will take place using a combination of life insurance and annuities. (Insurance Facts and Figures 2012) (Market Presentation 2013) (English 2009) (Anderson 2009) (Kinder 2002)

Evidence of this can be seen in the below table. It is showing how insurance coverage is higher in U.S. And UK in comparison with Australia. This means that there is a large demographic of consumers, who will need a variety of products and services provided by the firm.

Life Insurance Market by Concentration

Market

Life Insurers

Population (in millions)

Life Insurers per One Million People

US

3.4

UK

62

2.1

Australia

25

22

1.1

(Insurance Facts and Figures 2012) (Market Presentation 2013) (English 2009) (Anderson 2009) (Kinder 2002)

These figures are showing how most Australians are under protected when it comes to their life insurance, retirement and future planning needs. As a result, Jade Insurance will concentrate on a number of demographics to include: age, income, gender and ethnic background. The basic idea is to reach out to as many consumers as possible and offer them with solutions that will simplify their financial situation. It is at this point, when they can plan for the future and have more peace of mind through utilizing a prudent financial strategy. This will help them to be better prepared for critical challenges they will face and to reach key objectives on time. (Insurance Facts and Figures 2012) (Market Presentation 2013) (English 2009) (Anderson 2009) (Kinder 2002)

Marketing Plan

The marketing strategy will involve focusing on a large demographic of consumers. This will help the firm to address different needs and create a diversified client base. In the future, this will lead to higher capital reserves, profit margins and supportive of stakeholders. When this happens, the firm can have a positive impact on the lives of various interest groups and segments from across society. (Anderson 2009) (Kinder 2002)

Products / Services and Target Markets

Jade Insurance will market a number of products / services to cliental. The most notable include: annuities, life insurance, property / casualty, health and auto insurance. The basic idea is for the company to become an all in one solution that will address the customer's needs for a single low cost premium. (General Insurance Industry Survey 2010) (Global Insurance Market Trends 2012)

As a result, the firm will concentrate a large segment of consumers. Like what was stated previously, the firm will focus on the general demographic of 18 to 85. However, within this group are specific sub-categories that will need customized solutions. The most notable include: young adults age 18 to 45, women,, individuals who are going to be retiring within the next ten years, affluent families, middle class consumers, majority / minority ethnic groups, immigrants and men. (General Insurance Industry Survey 2010) (Global Insurance Market Trends 2012)

At the same time, the firm will reach out to large corporations and offer them with solutions that will address of their needs. This will take place through providing them with a bulk discount when they consolidate all of their policies down to Jade Insurance. These areas include: the firm's retirement accounts, property / liability coverage, business continuation / estate planning and health insurance needs. The combination of these markets will enable the company to reach out to large segment of consumers through creating value added solutions. (General Insurance Industry Survey 2010) (Global Insurance Market Trends 2012)

According to a recent report conducted by KPMG, they found that most firms are raising rates and not seeking to spread out risks with it saying, "The premium increases in personal lines have been achieved in an environment with higher competition. These have been partly through white label products. The penetration into these markets has been relatively limited, albeit growing, and the concentration of market share continues to be dominated by select firms." (General Insurance Industry Survey 2010) (Global Insurance Market Trends 2012)

This is showing how the marketplace wants to grow. However, most carriers do not offer customers with one affordable premium. Instead, they are receiving considerably higher costs from the lack of competition. This makes it more difficult for consumers to locate solutions they can afford to protect themselves, their families, their property and everything they worked for. (General Insurance Industry Survey 2010) (Global Insurance Market Trends 2012)

Moreover, a survey conducted by the OECD determined that there was strong demand for life insurance and annuities in Australia. However, the problem is that premium rates are too high. Evidence of this can be seen with the report saying, "In Australia, life premium growth turned positive in 2011. As life insurance risk premium revenues grew strongly while investment premium growth remained mute. This was primarily due to growth of individual annuities and individual life policies." This is showing how there is strong demand for insurance products among a large segment of consumers. The problem is that most insurance carriers will charge customers more and not provide them with adequate coverage. This leaves the individual unprotected in different areas of their life. To make matters worse, the person may not be able to afford additional premiums despite this need. As a result, Jade Insurance will reach out to this marketplace by offering reduced premiums and engage in strategies to more effectively reduce the risks for the customer. (General Insurance Industry Survey 2010) (Global Insurance Market Trends 2012)

Placement

The best way to help with product placement is to actively engage in corporate social responsibility (CSR). This is when the company will support various programs that will give something back to communities and stakeholders. Over the course of time, improves the brand image of the firm and the perceptions associated with it. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

A good example of this can be seen with observations form Servaes (2013) with him saying, "We conclude that corporate social responsibility (CSR) and value are positively related for companies with high customer awareness, as proxied by advertising expenditures. For a firm's with low customer awareness, the relation is either negative or insignificant. In addition, we find that the effect of awareness on the CSR -- value relation; is reversed for companies with a poor prior reputation as corporate citizens. This evidence is consistent with the view that CSR activities can add value to the organization. These changes occur based upon the lasting effect that these programs will have on stakeholders." (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

This is showing how CSR will have a positive impact on product placement of the firm through improving brand recognition and awareness. In the future, this will create positive feelings and emotions about the company. When this happens, a sense of trust will be built between the staff, managers, organizations, community and those who were positively affected by the program. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

At the same time, the company will use celebrity endorsements to create positive feelings about the services it is offering. This will be accomplished through finding localized stars and having them do a series online and traditional media ads. The basic idea is for them to talk about how the product can help consumers to reduce their risks and more effectively plan for their future. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

Moreover, the firm will have its advertisements posted at different national, regional and localized events. This will occur through posting the name and logo of the company in locations where it can be seen. For example, one possible way to this is to sponsor Australian cricket. This will enable the company to post its logo and name on the uniform. When there are any press conferences, it will appear directly in front of everyone and in the background. This will offer added credibility to the organization based upon the exposure it is receiving through supporting these events. If this were to occur in different sports for various demographics, the company could subconsciously connect with a large segment of customers. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

Promotions and Advertising

To promote the different products and services requires Jade Insurance using an all encompassing strategy. This will be achieved by focusing on a number of areas in conjunction with each other. The most notable include: online, traditional and local promotion. The combination of these factors will enable the company to reach out to a larger segment of consumers. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

Online, the firm will concentrate on promoting itself through social networking, pay per click advertising, offering new ideas to customers and email marketing. This will allow the firm to connect with potential clients who are interested what they have to offer via its landing page. Once they arrive, everyone has the opportunity to sign up for a free newsletter on personal finance and receive information about the firm's products. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

If they agree, the information could be passed on to agents in the area. They can call the customer and talk with them about how the firm can assist in meeting their different financial needs. The customer also has the option of not receiving phone calls and contacting a call center who can explain different products / services to them. This will offer full and on demand services in format they are most comfortable with. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

Traditional marketing will involve using TV, radio, newspaper and billboard advertising to reach out to a larger demographic of consumers. This is occurring through placing them at specific points, times and places. For instance, to help young adults, the company can promote itself to college graduates, those who have just entered the workforce / are starting a family and planning for retirement through different ads in finance magazine to this group. This will help the firm to have a customized message that will effectively connect with the audience. If this is used at different stages, the firm can create a targeted message that will reach out to the various demographics of consumers. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

Like what was stated previously, Jade Insurance will sponsor different sporting events and use celebrity spokespeople. This will add credibility to the firm's products and improve its image based upon these favorable perceptions. To learn more about different services, the firm will have a call center where everyone can inquire about what is available and connect with an agent. When this happens, people will automatically associate various products and services with the organization. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

Localized promotion will occur through having agents inside different regions work with customers closely. Their objectives are to follow up with leads based upon online and traditional marketing strategies. They will set up appoints at the client's home or contact them via the telephone. The basic idea is to offer them with one on one support. In many rural areas, these services will be more popular as these ideas are catered to this specific market. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

The combination of these promotions will help Jade Insurance to connect with a large segment of consumers. And offer them with products in a format that is most comfortable. When this happens, the company will market to different demographics of people and can dramatically increase its customer-based during this process. (Servaes 2013) (Anderson 2009) (Kinder 2002) (Baura 2006)

Pricing Policy

The firm will be known for its outstanding pricing strategy and dedication to customer service. This will be achieved through offering clients with the lowest guaranteed rates available. What will allow the firm to reach these objectives is the large number of carriers and reinsurers they are working with. This enables them to spread out their risk and charge customers lower premiums. (Anderson 2009) (Kinder 2002) (Baura 2006) (Kauzaki 2012)

A good example of this can be seen with observations from Kauzaki (2012). He determined that those insurance companies which have spread out the risks will offer customers with lower premiums and greater protection. This is because they do not have to rate their clients as high to effectively cover them with him saying, "For an international insurance company, the 'diversification of risks' takes on an even different meaning. In fact, the traditional activity of an insurance company requires it to have the ability to aggregate the individual risks of policyholders and to create added value for the policyholders themselves as well as for the market. In exchange for the payment of a premium, policyholders are to be compensated for the financial consequences of a loss, which they would otherwise be unable to sustain, by transferring the related risk to an authorized third entity, which can then define an equitable pro-capite cost at the same time drawing a financial return for its entrepreneurial activity. This is what is intended as the 'social function' of insurance. Thanks to international diversification it is then possible not only to enlarge the homogenous risk groups but also to ensure that you aren't too overexposed to a single country, as in the case of insurance against natural catastrophes. A further technical instrument is represented by 'reinsurance' that allows to keep the system in balance by transferring part of the risks to specialized companies. A higher level or degree of diversification can be achieved when investors further diversify between investment asset classes, namely shares, bonds, real estate bonds, commodities, private equity. Geographic diversification offers the possibility to invest in various markets and, therefore, in securities that is exposed to political and market risks in a number of different countries and whose market performance is basically not correlated with the investor's domestic market of reference. The possibility to invest in international markets is restricted by the ability to effectively access reliable information relating to international investment assets. Accessing such information generates additional costs while the limited number of transactions is a further obstacle to investment liquidity. And, finally, the interconnectivity of financial markets and the effects of globalization have further undermined the benefits of diversification in view of the growing correlation of markets worldwide." (Anderson 2009) (Kinder 2002) (Baura 2006) (Kauzaki 2012)

This is showing how the insurance industry is facing considerable challenges with reducing risk. The best way to achieve these objectives is to balance out exposure among customers, assets and the kinds of policies which are underwritten. Those who know how to share this with others will have higher profit margins and can offer clients lower premiums during this process. (Anderson 2009) (Kinder 2002) (Baura 2006) (Kauzaki 2012)

Operations

The operations of the organization are a vital part to the success of the firm. This is because the ability of the company to reduce risks is a central part in helping Jade Insurance to offer customers with more. As a result, the basic strategy will be focused on reducing costs for everyone, improving coverage and sharing the risk with others. These factors will create a standard for the firm to follow and implement basic guidelines that will monitor the activities of staff members. (Anderson 2009) (Kinder 2002) (Markham 2003) (Prichard 1999)

Legal and Licensing Requirements

Under the Financial Services and Reform Act, anyone who is operating in the field of insurance is required to be licensed. This means that firms, brokers and agents must register with the Financial Services Commission. Their job is to: test, monitor and ensure that everyone is following the different legal and ethical guidelines for the industry. (Anderson 2009) (Kinder 2002) (Markham 2003) (Prichard 1999)

Moreover, the firm and those working inside it must be able to comply with a number of other self-regulatory standards. To further qualify for professional distinctions, an individual can study and receive specific designations inside the industry. These include: the Australian & New Zealand Institute of Insurance & Finance and the National Insurance Brokers Association. (Anderson 2009) (Kinder 2002) (Markham 2003) (Prichard 1999)

As a result, there are different benefits that members will receive from working with these organizations. The most notable include:

Strong lobbying, advocacy and support.

Qualification, Certification and Training.

Mentoring.

Adapting with New Regulations.

Understanding Change occurring inside the Sector.

Providing a Verifiable Database for Customers.

Publications and Functions to help Everyone Network.

These different areas are important, as they are providing a basic foundation to firms and agents for improving their professionalism. When this happens, they will more effectively understand and address issues that are most important to customers. This is when the company can introduce win -- win solutions that will benefit everyone. (Anderson 2009) (Kinder 2002) (Markham 2003) (Prichard 1999)

Insurance and Security Issues

To protect the firm against possible litigation from misunderstandings, Errors and Omissions insurance will be purchased. This covers the company from any kind of liabilities associated with accidental misstatements from representatives. At the same time, an effective compliance department will be established. They have the power to investigate and censure employees. Their basic objectives are to ensure that everyone is following the different provisions of the law. When they do not, it is necessary to protect the best interests of the customer at all times. (Anderson 2009) (Kinder 2002)

Moreover, there will be a series of firewalls and an IT team created. They have the responsibility of making sure that all of the firm's databases are secured. This will be accomplished by working with a consultant who will help to establish these protocols. According to Graham (2011), firewalls are integral part in helping an organization to effectively protect itself with him saying, "Firewalls are part of a good defense in depth strategy. The idea is to place several layers of protection between your machines and the potential threats. There are some obvious threats from the outside, so you should naturally place a firewall between the outside and your internal network(s). Because a firewall is placed at the intersection of two networks, it can be used for many other purposes besides simply controlling access. For example:

Firewalls can be used to block access to particular sites on the Internet, or to prevent certain users or machines from accessing certain servers or services.

A firewall can be used to monitor communications between your internal network and an external network. For example, you could use the firewall to log the endpoints and amount of data sent over every TCP/IP connection between your organization and the outside world.

A firewall can even be used to eavesdrop and record all communications between your internal network and the outside world. A 56KB leased line at 100% utilization passes only 605 MB/day, meaning that a week's worth of Internet traffic can easily fit on a single 8mm digital tape. Such records can be invaluable for tracking down network penetrations or detecting internal subversion.] Such records also pose profound privacy questions and possibly legal ones as well. Investigate these questions carefully before engaging in such monitoring.

If your organization has more than one physical location and you have a firewall for each location, you can program the firewalls to automatically encrypt packets that are sent over the network between them. In this way, you can use the Internet as your own private wide area network ( WAN ) without compromising the data; this process is often referred to as creating a virtual private network, or VPN . (You will still be vulnerable to traffic analysis and denial of service attacks, however.)" (Graham 2012) As a result, taking this kind of approach will help the organization to more effectively compete.

The next step is to have consultants continually test it for possible breaches. During this process, employees will be involved by learning how to identify and report possible threats early. This will help the company to have the highest standards for protecting the personal information of their clients at all times. (Anderson 2009) (Kinder 2002)

Business premises

The company will operate out a small office building located in Sydney. This will be where they underwrite policies, provide support to agents, address compliance issues, answer customers' questions (via the call center) and work with other carriers. At this location, there will be approximately 100 employees. (Anderson 2009) (Kinder 2002)

The sales force will be 200 agents throughout the commonwealth. They will work as independent contractors for the firm. In this situation, they agree to meet a quota established by the firm for monthly goals. Headquarters is providing them with support and clients in their area. Each agent must service and build a strong relationship with customers in accordance with company procedures. This will keep costs low, as agents are responsible for their own office / travel expenses, taxes and other benefits. (Anderson 2009) (Kinder 2002)

Equipment Required

There are a number of pieces of equipment that will be required by the firm. The most notable include:

Copiers / fax machines / printers: There will need to be at least 8 different multi-use copier / fax machines / printers. It can print in color and quickly be adapted the meet the needs of different personnel.

Computers: In this case, the firm will need 105 desktop computers and 30 laptops. This is to provide the company with the technology it needs to effectively communicate with stakeholders.

T 1: This is an underground cable and telephone system that will route all inbound and outbound calls to the company. It will support and sustain the needs for the call center / company headquarters well into the future.

Servers: A total 4 servers will be required to backup all platforms and effectively link the various departments together.

Video / telephone / internet monitoring: This is a closed circuit security system that will monitor the telephone calls, online activity and what employees are doing at their desks.

These are some of the basis resources that are required to help Jade Insurance offer an all encompassing solution for consumers. (Anderson 2009) (Kinder 2002)

Production Process

The production process will focus on having everyone go through a series of stages to develop new business. This includes: generating leads, making the lead stronger, meeting with the customer, following up and analyzing what happened. Generating leads is when the firm will collect names of potential customers who are interested in its products and services. This is achieved through: online sources, cold calling, referrals and call ins / walk ins. Making the leads stronger is when the agent will determine their needs and schedule a time to discuss it. Meeting with the customer can take place in person or over the telephone. This is when the agent will present them with different products and close the customer. Following up is making sure that the client is happy and ensuring their requirements have not changed. This will occur at least once per quarter and as necessary for each customer. Analysis is looking at what happened and determining if value was created. This process will ensure that the company has a continuing stream of new cliental they are helping. In the future, this will enable the firm to become a dominate player inside the sector and redefine how these products are distributed to customers. (Anderson 2009) (Kinder 2002)

Critical Risks and Contingency Plans

The biggest risks facing the company are there could be claims much larger than its actual reserves could handled. This could occur after a terrorist attack or some kind of natural disaster in large areas. To prevent this, the firm has been aggressively working with reinsurers and other carriers to spread out the risk. (Anderson 2009) (Kinder 2002)

There is also the possibility of the company being subject to lawsuits based on claims that are made by employees and agents. This problematic, as the firm could become the target of class action litigation. To deal with these challenges E & O. insurance will be purchased. This will settle any kind of outstanding issues before they become very large. (Anderson 2009) (Kinder 2002)

These ideas will help the company to more effectively deal with risks. However, the firm will increase its net capital and reserve requirements above the industry standard. This will help allow it to have an additional cushion against sudden shocks and a source of funds to address immediate problems. (Anderson 2009) (Kinder 2002)

Financial Projections

Capital expenditure forecast

The estimated net capital forecast is $2 million. For the first six months, there will also be required injections of at least $25 thousand. This will ensure that the company has the resources it needs to effectively promote itself and reach out to new cliental. When this happens, they can more effectively connect with them and offer customized products / services. (Anderson 2009) (Kinder 2002)

Sales Forecast

For the first year, it is projected that company will earn $1.5 million. This will be followed by improvements in years two through five with them ranging from $3.2 million to $15.6 million. If there is any kind of strategic acquisition, these figures could be lowered based upon the added value this could provide to the entire organization. (Anderson 2009) (Kinder 2002)

Cash Flow Forecast

The cash flow is forecasted to come in between $150 thousand to $400 thousand. During this process, these funds will be reinvested back into the firm. The basic objective is to help improve the company's marketing position and to take advantage of new opportunities. (Anderson 2009) (Kinder 2002)

Projected Profit and Loss Statement

Below are the projected profits and losses for the firm.

Profit and Loss Statement

Category

Amount

Revenues

$1.5 million

Fixed Expenses

$400 thousand

Variable Expenses

$150 thousand

Labor Expenditures

$100 thousand

Taxes

$150 thousand

Free cash flow

$150 thousand

Profit Margin

$700 thousand

(Anderson 2009) (Kinder 2002)

Owners Personal Expenses

The owner's personal expenses are related to coming to work, out of pocket expenditures and reimbursing them for the costs of running the business. For 2013, this is estimated to be $75 thousand. (Anderson 2009) (Kinder 2002)

Environmental Responsibility and Econ Sustainability

The firm will have practices which are encouraging everyone to recycle through different programs that will be enacted. At the same time, the Sydney headquarters will have energy efficient products and resources to reduce the firm's environmental footprint. To help sustain these practices, Jade Insurance will take an active part in supporting community programs in these areas. This will help to create alterative strategies to change current practices. When this happens, the company can ensure it is making a difference in the quality of life for stakeholders. (Anderson 2009) (Kinder 2002)

Implementation Timetable

The firm will be opened in the course of one year. During the first three months, the operations will be established and all regulatory / licensing will be addressed. Once the firm is approved, the company will begin slowly advertising itself using in house customer service agents, traditional and online media. This will take place in months 4 though 5. (Anderson 2009) (Kinder 2002)

In the last six months, the company will begin recruiting agents from around Australia. This is so they can help market the firm's products in specific regions using more localized techniques. At the same time, the number of carriers and underwriting capabilities will be improved. This will enable the firm to offer a large line of products and to take on some of the risks of its own through self underwriting. Once this happens, the company can offer consumers with better coverage at lower premiums. (Anderson 2009) (Kinder 2002)

Conclusion and Future Directions

Clearly, Jade Insurance can redefine how insurance products are being sold in Australia. This will be accomplished by providing customers with a larger assortment of choices and lower premiums. The combination of these factors will help them embrace volume discounts and bundling to address their continuing needs. At the same time, more localized approaches will be used to reach out to people who are in rural areas. This will help them to improve coverage and reduce any existing gaps. For those who do not want as much assistance, they can work directly with the company at its call center or through the Internet. This means that they will receive reduced premiums based upon the lower amounts of service that is required to help them. These objectives will be achieved through working with numerous carriers and improving capital reserve requirements. This will enable the company to have a larger assortment of products and services.