Help with a Niche

[Halpert]

I'm a newer producer in a large commercial agency. I think the best approach to being successful in this business is to establish myself as an expert in a niche. Having said that, I don't know what niche I should be targeting. I would like to stay away from construction and manufacturing as there is severe competition there. Any suggestions? My accounts have to generate at least $5,000 in commission and I'm not sure what other classes to target.

Thanks.

[Big Dog]

A lot depends upon the area you live in. What industries are predominant in that area? As an example, Houston (where I live) has two major industries - oil/gas/energy, and healthcare. Each of these are highly specialized, and a "good" producer will need to know the intricacies of the coverage requirements.

For example, I work for a large healthcare provider (i.e. hospital). From a property standpoint, we're classified as a HPR (highly protected risk) client, with multiple locations and huge property values. An agent "claiming" to be an expert had better know what markets have the broadest primary coverage, and they'd also better know how to properly put together a layered program. Many say the do, but few can actually deliver. Same goes for the Professional Liability coverages. A broker had better be a real expert in this area.

Pick two or three industries that you actually KNOW what their needs are and what the basic exposures are. Then find out who the best markets are for them that your agency represents, and contact them for information on how to best market to these industries.

[jimmyr1978]

I'm a newer producer in a large commercial agency. I think the best approach to being successful in this business is to establish myself as an expert in a niche. Having said that, I don't know what niche I should be targeting. I would like to stay away from construction and manufacturing as there is severe competition there. Any suggestions? My accounts have to generate at least $5,000 in commission and I'm not sure what other classes to target.

Thanks.

If you have a mentor or direct supervisor, don't hesitate to use the market leverage they have in their niches. I have been successful in my 2 target niches because I have been mentored by someone with a large book in these industries. Using that leverage with an underwriter can help you get deals done where others can't. You can also use his/her referral sources, contacts, etc.

Also, consider 2-3 niches so that you can diversify your book to protect you against the ups and downs of industries. For example, real estate is going to stay relatively steady, as every building around requires insurance, though pricing has been soft for the past few years. Trucking, on the other hand, isn't as susceptible to the insurance market cycle, but it's an inherently volatile industry, with 20-40% decreases in premium volume for many trucking companies during the past 2 years due to shrinking fleets. As another example, a large producer in town had all his eggs in the home building industry. How do you think 2008-2010 is treating him?

Some niches to consider: Commercial/Investment Real Estate, Technology/Telecommunications, Municipalities, Non-Profits, Transportation/Trucking, Healthcare (hospitals, clinics, physicians, medical device cos., etc.)

[kevinraz]

What do you have experience in? Have you worked in restaurants, construction, transportation, anything? Perhaps use that as one place to start with something you already know a bit about.

Then go to what interests you. Have you always been interested in biotech? Aviation? Anything else?

The idea here is that a niche comes easier when it's interesting to you. You'll spend more time on research and will get to know it better.

And be patient...time to study, time to gather leads, time to get in front of clients...it can take a year+ to start seeing results. Plan on this & discuss it with your boss. They either need to be patient or you need to have something else going on to bring in some revenue in the meanwhile.

But if you spend 5+ years on a good niche, say aviation or energy, & get good, you will reap serious rewards!

Problem is surviving that long!

[Producer#1]

I used Reference USA, this is a free business search engine that you can access via most public libraries. With this, you can pick a few SIC Codes that interest you, and then search in your geographic area. With this information you may be able to determine which niches could be profitable for you.
I would then meet with you carriers to see what their appetite is.
IE: A good niche is one that is prospect rich in your area, and one that your carriers will want to write.

[Halpert]

Great information! Thanks everyone for the replies!