How to grow your small commercial book of business
Go niche and go big: Independent insurance agents must differentiate themselves from the pack.
How likely are you to travel two or three towns away to go to a supermarket to do your weekly grocery shopping, when there is a fully stocked store right in your neighborhood? Not likely.
But what if you wanted to try making your own sushi and needed special ingredients? In that case, you probably would travel out of your way to a specialty food store.
The same thinking can be applied to small business commercial insurance products. Many agencies are generalists and can cover the most common business types including contractors, retail and professional services. For routine insurance needs, potential customers often stay within their communities, using the services of agents in their neighborhoods who can help them with coverage.
It follows that the competition to sell routine coverage is only getting fiercer. InsurTechs — and some carriers — are developing direct-to-consumer options, which cut independent agents out of the process all together.
It’s an important time for small commercial independent agents to differentiate themselves from the pack by going niche. That means focusing on a niche industry or multiple industries and becoming the expert in that market, its risks and unique insurance needs.
For those who might be hesitant to completely overhaul their agency structures, let’s clear up a misconception. Becoming specialized in a niche industry does not mean that you’re no longer a generalist. Instead, it is about supplementing general coverage with a specific expertise in one, two or even three specialized sectors that will help you differentiate from your competitors and give you a much bigger opportunity to grow your book.
Here are three steps independent agencies can take to become specialists in niche markets.
No. 1: Analyze the data to identify target niche markets.
Look at your current book of business. You might already have several clients in a specific niche industry that you can build upon. If you use a quoting solution or comparative rater, delve into what types of coverage options you have provided quotes for. For example, one of our customers recently issued a quote for a members-only hair salon, which could be a burgeoning niche within the hair styling industry.
After looking at your internal data, look into the broader market. You don’t want to pick an industry so specialized there might only be one or two clients. Consider how many potential customers are in this industry, the geographic reach of your agency and any plans to expand, and who might be your key competitors for servicing this type of customer.
No. 2: Make sure customers know you’re the expert.
Once you decide on what niche industries to specialize in, let your current and future customer base know it. Create a separate landing page on your agency website devoted to the sector. Develop thought leadership in the form of blogs that can be posted on the website or your own personal LinkedIn page. Develop case studies that address the unique concerns of the sector.
Utilize social media. Regularly share insights that address the insurance needs of the niche industry. And comment on relevant articles. For example, if you decide to specialize in micro-breweries, share and comment on articles about microbreweries in your target client area and tie your comments back to what they may need in terms of insurance.
Finally consider adding a specialist to your agency. Independent agents come from all backgrounds. Adding a new agent with previous experience in your target industry can help you understand the nuances of the sector.
No. 3: Don’t forget about the customer experience.
Prospects from a niche industry will seek out your agency because you are the expert. They want to spend their time with you speaking about the nuances of their business, their unique challenges and concerns, and how you can the tailor the product to meet their specific needs. They don’t want to spend the time on process matters such as waiting for multiple quotes from carriers.
Implement solutions, such as automated quoting tools, that save you time and allow you to focus more on the client rather than re-entering data. Also consider self-service options for the client, such as a customer portal, which allows them access to policy information, make simple changes, or get answers to common questions.
Focusing on a niche industry can help differentiate independent commercial insurance agents from their competition and get the attention of prospects outside of their immediate vicinity. By looking at smaller specialized sectors, agencies can more easily grow their books of business.
Philip Charles-Pierre (philip@semsee.com) is CEO of Semsee, an InsurTech that provides automated small commercial quoting solutions for agents.
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