State Farm Insurance Business Plan Template – Fill Out and Use This PDF

STATE FARM

ABINGDON, VIRGINIA BUSINESS PLAN

Vision

Vision

We will be servant leaders to our customers while nurturing a mutually beneficial lifelong relationship with them.

Mission

To be Washington County’s premier source of wealth creation and preservation, asset protection and management, and insurer.

Goals

•Leverage and translate the strength of the State Farm brand and reputation in property & casualty protection into a broader financial services arena more directly associated with bank and securities products to insulate the company from the rate sensitivities of auto insurance and the potential reforms of health care. Reposition the agency as a financial services specialist while continuing to implement the “auto insurance as lost leader for multi-lines of business” model for the growth and maintenance of the existing book of business.

•Develop an online and social media marketing platform to leverage the cost efficiencies of this medium while gaining traction and loyalty with Generations X and Y.

•Develop strong alliances with the abundance of college campuses in the vicinity and begin nurturing lifelong relationships with this potentially elusive demographic. Lead with bank products that appeal to this segment (Student VISA, Credit builder VISA, Checking, Savings, and Vehicle Loans) to instill a financial services mindset from day one. Foster these relationships as a prime employee recruitment tool. Target the faculty and administration offices of these institutions for all product lines.

•Monitor the implications of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act and adjust projections for health-related insurance lines as necessary for years 4-6 (2014-2016) of this plan.

•Become known as a knowledge base for financial services by offering a series of educational programs for the general public.

•Be among the Top 100 TICA by qualifying through Life Premiums, Health Premiums, New Mutual Fund Accounts, Auto Production, and Bank Commissions.

•Qualify for Level 1 Ambassador Travel.

•Conduct IFRs with each client every 18 months to maximize multi-lining opportunities.

Local Market Context

Target Market

•Washington County was established December 7, 1776 and was named after George Washington. It encompasses 560 square miles.

•There are three towns located in the County as well as the communities of Emory, Meadowview, Mendota, and Saltville

•Emory & Henry College, founded in 1836 and located in Emory, is one of the oldest colleges in Southwest Virginia. Southwest Virginia Higher Education Center, located in Abingdon, represents a partnership of seven universities providing satellite education services.

•Abingdon is known as “Little Richmond -- the State Capital of Southwest Virginia” with its 42 state agencies and Federal Courthouse serving as a regional service center for medical, professional, and governmental services.

•Abingdon has a significant arts and culture infrastructure, most notably the Barter Theater of Virginia, the “State Theater of Virginia”, one of the oldest professional theaters in the nation founded in 1933, the William King Museum Regional Center for Art and Cultural Heritage, and the regional artisan center, Heartwood, currently under construction on the grounds of Virginia Highlands Community College. Word on the street is that this little town just might be on the verge of discovering its creative economy to become the next Asheville. It has been a sudden, subtle change, but seemingly overnight, the same sort of art galleries and crafty, eclectic shops that define that North Carolina tourist center are popping up here.

•The independent city of Bristol, Virginia (population 17,400) borders the County.

•Washington County is a major tourist destination with historic landmarks and accessibility to national and regional recreation areas.

•Major roads include Interstate 81 (with 15 exits, the most of any county in Virginia), which runs through the County’s central valley. Other main highways include State Routes 11, 19, and 58.

•Commercial air service is primarily provided through Tri-Cities Regional Airport in Blountville, TN, approximately 10.4 miles from the County. General aviation service is also provided through Virginia Highlands Airport in Abingdon.

•Rail service is provided by Norfolk Southern Railway Company.

Population and Demographics

The County’s current population estimate is 54,443, a 6.5% increase since the 2000 Census. An 11% growth rate from 1990 to 2000 made it the only county in the Southwest Virginia area to have experienced an increase during that time. The population is primarily caucasian (97.1%) with an African-American contingent of 1.7% and a median age of 41.1. Unemployment currently hovers just below 9% against a state average of ~7%. The top 10% (1,733 HH) of owner- occupied housing values are above $300k with the majority of that total (81% or 1400 HH) ranging from $300-499,999.

Twenty-one percent of the population has a Bachelor’s Degree or higher and a median income of $39,865 (versus $61,044 for the state) with the top 10% making $100k or more.

The top 50% of the workforce, or 9,713 of the county’s total 19,425 employees as of 4th quarter 2009, is divided between trade, transportation, and utilities (24.5%) and education and health services (24.1%) with an additional 17.2% in manufacturing. Calendar year-to-date estimates through June 2010 put average employment at 24,779 per month, a 27.6% increase over 4th quarter 2009.

Economic Development

Recent major commercial projects include:

•$40 million The Highlands (big box retailer, Target, along with 9 baby box retailers and 4 out-parcels)

•$4 million Sam’s Club

•$22 million Johnston Memorial Hospital Regional Cancer Center

along with planned investment of $40-60mm in the Ridgecrest Center and $16mm in the Heartwood Regional Artisan Center.

EXISTING BUSINESS & INDUSTRY WITH 100+ EMPLOYEEES

EXISTING BUSINESS & INDUSTRY WITH 100+ EMPLOYEEES

+Virginia City Hybrid Energy Plant Construction Temporary Workforce through 3/2013

SWOT Analysis

Strengths

•The inherent strength and integrity of the State Farm brand as a property & casualty insurer.

•The depth and breadth of the product lines available through State Farm.

•A viable geographic market that has demonstrated respectable strength and growth in a tentative economy.

•A predominantly white-collar and diverse economy (medical, professional, governmental, educational, and tourism) with a natural predisposition for the State Farm line of products.

•Relationships with securities customers are more resilient than those based exclusively on insurance.

•Experienced real estate broker with proven sales, business development, and networking abilities.

Weaknesses

•Brand strength as a property & casualty insurer overshadows and limits the perception of and expansion into a broader financial services segment.

•Auto insurance is highly competitive and rate sensitive. State Farm does not have the brand inertia and loyalty with Generations X and Y that it has enjoyed with prior consumer segments.

•The Washington County unemployment rate is higher than the State average.

•Online marketing is drastically underutilized in the insurance industry as a whole. A recent report stated that 48% of independent insurance agents have web sites, and of those, only about 20% keep the sites updated.

•Securities products have not been aggressively marketed in Washington County.

Opportunities

•Maintain the existing “auto insurance as lost leader” model for multi-lining while dedicating a financial services representative to aggressively market directly to that segment’s growth and capitalize upon the nation’s transference of wealth phenomenon.

•Design an approach that shields the agency from auto insurance rate sensitivities and health insurance reform uncertainties.

•While the overall Washington County household market penetration of 20.6-25.6% is commendable, growth to 30% does not seem unreasonable. County-wide penetration levels of 1.4-1.6% for State Farm Bank suggest room for considerable growth.

•The auto and fire penetration levels for Abingdon are 19.4% and 12%, respectively, signaling potential market-specific growth for these product lines.

•2010 Census Data will be available in March 2011. Revisit and refresh this plan as needed at that time.

•Promote Life, Bank, and Mutual Fund products to the market’s 47% medical, professional, governmental, educational, and tourism professionals.

•Target the county’s 30% of households with a presence of children below the age of 18 for Education Savings, Life Insurance.

•Solicit rental coverage from the county’s 6,000 rental households.

•Use social media to target tech-savvy professionals and college students. According to Forrester Research, more than four in five U.S. online adults use social networking tools — Facebook, LinkedIn, YouTube, Twitter and blogs — at least once a month, and half participate in social networks. Develop an expert reputation in insurance and financial services by creating conversations with consumers that will lead relationships by offering valuable content, suggestions, opinions, and engagement by spreading our knowledge and service throughout the virtual world.

•The County’s relatively high unemployment rate creates increased demand for 401k rollovers and short-term health insurance policies.

•Pursue the top 46% of the market (ages 45+) for Long Term Care, Whole and Universal Life, and Mutual Funds along with Medicare supplements from the 14% of households ages 65+.

Threats

•Financial services companies whose brands are more firmly entrenched in that arena: Edward Jones, Charles Schwaab, etc. command the market’s attention right now.

•Other insurance companies whose reputations in the financial services arena is more established: Northwestern Mutual Life, New York Life, etc. have more top-of-mind awareness in this segment.

•The implications of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act that will take effect in 2014 and related impacts on all health-related insurance lines are largely unknown.

•An emerging, fickle generation that demands a highly sophisticated social media business platform.

•Insurance companies with a presence in Abingdon

•Aflac, 21553 Carol Jane Lane

•Allstate, 158 E. Main Street and 439 E. Main Street

•Farmers Mutual, 640 W. Main Street

•MetLife, 1000 W. Main Street

•Nationwide, 480 W. Main Street and 1070 W. Main Street

•New York Life, 458 E. Main Street

•Virginia Farm Bureau, 395 E. Main Street

Team Development

Recruiting

Recent college graduates seem perfectly suited for the kind of structure found in State Farm offices. We will align ourselves and maintain ongoing dialogue with the career placement offices of East Tennessee State University, Emory & Henry College, King College, Radford University, Southwest Virginia Higher Education Center, and Virginia Highlands Community College. We will sponsor campus recruiting programs appropriate for each location and participate in the annual Interstate Career Fair on April 7, 2011 at which each of these colleges along with Tusculum, Virginia Intermont, Milligan, Concord, Bluefield, University of Virginia-Wise, Mountain Empire Community College, Tennessee Wesleyan, and Northeast State Community College will be represented. Having a presence at this event will allow us to reach 300 potential candidates.

Opportunities will be promoted on Facebook, LinkedIn, and Monster.com. Past experience has shown good results with recruiting employees from whom excellent customer service has been received in the normal course of business, and we will constantly screen for talent in our own day-to-day dealings with such individuals and service providers. To a cautious extent, we will look for candidates within our book of business through the normal course of conversation with our policy holders and clients. We will network with and solicit referrals from business owners and through the Abingdon Civitan Club, Abingdon Newcomers‘ Club, Abingdon Rotary Club, Southwest Virginia Board of Realtors, Rotary Club of Washington County, and Washington County Chamber of Commerce. We will incentivize our employees with a $250 per new hire referral commission. We will host our own Career Fairs as needed to generate a pipeline of potential candidates. We will not overlook the opportunity to enlist the “trial model” afforded by reputable temp agencies applying specific screening criteria as needed.

Screening

We will use a combination of IQ, personality, and career assessment tests available from State Farm (Marketing Services Behavioral Indicator/MSBI) as well as outside resources (kolbe.com, wonderlic.com, caliperonline.com, and limra.com) to maximize the opportunity to identify, build, and develop the best possible team. We will utilize results to assess abilities, define roles, align the organization, provide training, and coach deficiencies.

Structure and Development

Three team members will be responsible for the maintenance and growth of the existing book of business and a fourth team member will be hired as a financial services specialist with a goal of adding a second specialist by year four. We will also solicit two unpaid internships per semester from the local colleges to augment our telemarketing and general office duties (photography, etc.)

All paid team members must be licensed for Property & Casualty, Life & Health, and Medicare Supplement & Long Term Care within the first 60 days of their employment. Financial service specialists must also obtain their Mortgage and Securities Licenses, which I will hold, too.

We will develop an office-specific agent certification program outlining additional training requirements for career advancement and success. This comprehensive program will include office standards, systems, and processes along with requirements for civic involvement and professional development.

Compensation

General team members will be paid an hourly wage of $9.25-11.75 plus tiered commissions on all new (one time) personal production. The financial services specialist will receive a modest base salary ($22k) plus an enhanced tiered commission on all new (one time) personal production. Quarterly incentives will be tied to the SMVC and Scorecard Bonus for the entire office with total compensation ranging from $20-28k for all general team members and $36-42k for specialists.

Sales & Marketing Strategy

Approach

Sales & marketing activities will be developed as two tracts: general agency and product-specific financial services.

General Agency

The efficiencies of online and social media will be leveraged to energize and supplement the traditional dialogue with our existing book of business while gaining traction and developing loyalty with Generations X and Y. We will employ Search Engine Optimization (SEO) tactics to drive traffic to our agency micro-site and incorporate a daily blog that will not only be used to position ourselves as an expert in insurance and financial services but will also create even more searchable content for our SEO initiative. We will exploit the economies of site analytics that are available free of charge through Google and Yahoo to monitor and measure our site’s performance and growth as well as the modestly priced services of Universal Business Listing (ubl.org) that distributes to all major search engines, yellow pages directories, social networks, mobile phones, GPS navigation and 411 directory assistance.

We will develop push email campaigns for each of our product lines and track response rates and click-throughs.

We will create a Facebook fan page and use push email in conjunction with an offline handheld paper fan campaign targeting college campuses to attract 1,500 fans to our page within the first year. We will offer timely, relevant, and valuable content on local and industry news and events and administer the page with diligence.

We will enlist text messaging as appropriate with all clientele below the age of forty.

We will offer and encourage the use of Skype as an alternate means of conducting IFRs, while letting the customer choose their preferred means of interaction.

A systematic process for maximizing the capabilities of Prospector+, X Dating, and Backroom Technician will be developed.

We will use radio and outdoor along with a local newspaper and magazine advertising schedule to promote our brand.

Memberships and Boards

We will join the Washington County Chamber of Commerce, and each employee must be actively involved in at least one, distinct civic organization. I will serve on two boards during the first three years, preferably the United Way of Washington County and the Barter Theatre.