Not saying it's not possible, but you'd have to sell to the people you're going to govern that they need a government. Otherwise it wouldn't work. You'd have afghanistan-like resistance anywhere you tried.
But in areas with "Afghanistan-like resistance", there isn't a lack of government. Authority figures rising up to fill a vacuum is just natural.
You don't need to sell the idea of government, however, if you have guns, and they do not. The fact there is a private security force in the first place implies that the security force is better at what it does than a militia, but it is hard to organize a militia without some kind of authority.
But let's go further... Your argument is "Because thugs might take over some area after the abolition of the giant gang of our current government, we should just agree to be ruled over by these thugs indefinitely." Pretty solid philosophy to live by, I guess, but I would opt to live freely, even if it's only possible for a generation or two, or a year or two.
Most people, however, would
not opt for what you're "offering", which is why not many people are leaping at the opportunity to establish mini-Somalias in the heart of America. People, time and time again, are perfectly fine with sacrificing the mystical idea of freedom in favor of practicalities such as security. Most people aren't going to fight for something that would last "only a year or two" before men with big guns come storming back in, putting their families in danger and livelihoods at stake.
This is the biggest flaw with this idea. It is the idea that freedom is more important than literally everything else, and therefore we should just reject concepts such as citizenship.
In order to be viable, your profit rates would probably not allow for you to raise your own army as a private defense insurance agency. Raising an army the size that you'd need to take over an area in the first place would cost an enormous amount of money. It probably wouldn't go unnoticed, so other defense agencies would bring in some extra defensive hardware which would further increase the capital investment before any return. People that don't want to be in the danger zone would move out thus your profits during occupation goes down and the business venture loses end-value... THEN you occupy an area and the populace isn't passive, so you have to spend even more money trying to hold these people under you as slaves, as they refuse to pay their taxes and shoot your guys on sight.
You slammed another user in this thread about their education (or lack thereof), but you're not actually providing sources.
For starters, you claim "profit rates" would probably not allow you to raise your own army as a private defense insurance agency, but this idea assumes that a private security force is operating by the same rules as your local bakery.
For example, you say "raising an army the size that you'd need to take over an area in the first place would cost an enormous amount of money", but ignore the fact that similar groups operating on profit motives, such as your average warlord, have managed to do just that in various regions around the world throughout history. Clovis was, at first, little more than just a warlord. There is plenty of money to make going around and looting from communities that lack proper defenses to go against a dedicated military force.
"Other defensive agencies would bring in some extra defensive hardware". How do they get the money for this hardware? The people paying the defensive agency to protect them, clearly. If the defense agency points out that a neighboring community's "defense" agency is building up a large force, what choice does the community have but to foot the bill for more intricate defenses, more military personnel, and other supplies for their defense force. After all, the alternative is to
not do so and risk the possibility of having their own community sacked and looted.
The allocation of resources to "defense" agencies can't end very differently from how warlords usually end up in real life. Either a perpetual state of building up, somebody wins, or everybody together demilitarizes. However, to convince everybody to demilitarize is very difficult when you have five, six communities. It only would take one community to cancel their end of the bargain and to gain an advantage.
You say "you have to spend even more money trying to hold these people under you as slaves", but again, this isn't how it works in the real world. It isn't hard to find one, two, twenty, fifty, hundreds of people who will put self-interest over nifty ideas such as "freedom" in order to get ahead. An invader comes in and makes everybody slaves? They're awful. An invader comes in and this new "government" thing they keep going on about would include you and a couple of your family members on a ruling council that makes decision for the community? Sounds better. You might even go out and convince some other people this can work out for everybody.
This is how these things work. An invader comes in, some people are worse off, even a lot of people, but the occupation is able to last because the invader is either willing to sit on the community they're occupying, or willing to find the ambitious members in the middle and lower classes, given them a book of ration coupons and vouchers, and tell them they're in charge of giving out this coupons and vouchers to people on their block.
And even when the invader goes away, the natural "order" of the way things were before won't suddenly come back. The guys in charge of handing out ration coups and books? They're probably in trouble, but from the mob leading the charge against collaborators, leaders will emerge. Respectable men and women people of the community will turn to and trust, and in order to make the community better able to defend against future invasions, there will always be calls to give said members more powers in order to carry out their mission in the name of defense.
It is almost as if people, long ago, looked at the idea of governance and rationally came to the conclusion that despite the bad, the benefits outweighed the costs. All of a sudden, I have to pay taxes, but I'm also able to walk down a street without having to pay money to several "private defense insurance companies" on my way downtown.
None of this is profitable, and I'll probably be assassinated. I'll remain as a relatively successful private defense insurance agency, thank you.
No you wouldn't, because your business model as you laid out is awful. Even the phrase "private defense insurance agency" is as phony as the idea of "defense ministers". Just because you're bad at your hypothetical job doesn't mean everybody else would be.