The importance of specialization
How will broker specialization revolutionize the customer experience?
Emerging risks are creating new areas of business that agents, brokers, intermediaries, and insurers must embrace to continually grow business in the future. In fact, a survey of middle-market brokers by McKinsey shows two-thirds expect to shift to a more specialized model within the next half-decade.
Mike Furlong, CEO and co-founder of Indio Technologies, shared with PC360 the ways he sees specialization impacting agents, broker, and the insurance industry.
PC360: For generalist brokers, what are the common reasons why they are hesitant or choose not to specialize?
Mike Furlong: For generalist brokers, their mindset is often centered around covering as many industries as possible. They tend to feel that specializing limits their opportunities since they’re honing in and focusing on one specific industry instead of a variety. What they overlook is that specialization can in fact greatly improve their business because they’re able to form strong industry relationships, increase productivity, reduce competition within their chosen field, and make daily operational tasks more efficient and strategic.
PC360: How have you seen specialization positively impact a broker’s business?
MF: With specialization, we’re seeing brokers positively impact and improve their business in a variety of ways. Specialized brokers have the ability to take advantage of new opportunities that enable them to better serve clients.
To start, specializing can help brokers enhance their sales and marketing tactics. Clients increasingly expect tailored services across industries, including insurance. Brokers who specialize are able to cater to the needs that exist based on their experiences and what they’re seeing unfold in the industry. From there, they can foster enduring relationships with clients by catering directly to their needs, ultimately helping increase a client base and improving retention. Brokers can also develop and strengthen their network by attending industry events and meetups that cater to their specialization. Cannabis, autonomous vehicles, and cybersecurity are just a few growing industries where we’re seeing broker specialization. By attending events and conferences catered to these markets, brokers can build positive relationships with industry professionals and increase name recognition, helping generate more business.
Brokers who specialize are also able to develop product expertise in their selected field, leading to increased productivity, workflow, and more efficient operations. In order to be seen as a credible, go-to-source within a specialized field, brokers must know the ins and outs of the industry. By increasing their knowledge on an industry topic, brokers better understand the needs of their clients, providing them with the tools they need to provide unmatched service.
Lastly, specializing provides brokers with the opportunity to focus on a niche that is of interest to them both personally and professionally.
PC360: What are the cons to specialization?
MF: Specialization requires brokers to devote a large amount of time and energy to becoming experts in their fields. In order to become credible specialists, they must conduct market research, review trends and news, and stay up to date on all the ways in which their clients can be impacted by their niche industry. While brokers aren’t able to become specialized experts overnight, the benefits of offering this type of service to clients is worth the dedication and effort.
PC360: How do consumers perceive specialists? Are they more likely to use a specialist or are they okay with using a generalist broker?
MF: While choosing a broker comes down to personal preference, consumers who decide to move forward in working with specialists can often find that they’re able to take advantage of the benefits that generalist brokers aren’t always able to provide. This includes more targeted, direct coverage that is tailored to their area of focus, and a new level of expertise and guidance regarding industry-related risk.
PC360: Do you have any advice for new brokers who may want to specialize?
MF: Now more than ever, businesses need specialized insurance assistance in popular and trending markets. Professionals responsible for applying and/or renewing insurance are often unsure of their risk exposure or what coverage they need. Being able to help these businesses by specializing in a particular niche provides brokers with a new opportunity to offer more value and expertise to clients than ever before. If interested in following this path, brokers must do the following:
- Carve out your specialty and become an expert in it. Brokers must know the ins and outs of their niche in order to speak with authority on the topic. This is incredibly important in order to be viewed by potential and established clients as a credible advisor.
- Follow your market. Brokers need to demonstrate their knowledge and understanding of their area of specialization. Attending conferences, meetups and industry events that are centered around their focus helps increase industry awareness. Brokers must also review trends, news, and changes that might affect their clients and assess risk on a regular basis. This will allow them to provide extraordinary service to clients with their attention to detail and knowledge of the industry.
- Utilize technology. Brokers who utilize technology can focus more on developing their specialization capabilities and providing unmatched customer service than wasting time on manual tasks.
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