Best of the Best: Developing Niches

According to the 2014 MarshBerry Market & Financial Outlook report, 25 percent of commissions/fees are earned on accounts in the construction and manufacturing industries within an average agency. As the economy ebbs and flows, the insurance revenue tied to these industries benefits or suffers. We believe the development of niches within an agency to help drive consistent and predictable growth, is a practice of the best of the best agencies because niches generally provide revenue diversification (by industry), a competitive advantage, and niches can help with new producer development and success.

As an agency grows, the number of niches generally grows. We have found that agencies just starting down the path of niche development often ask for help in how to begin.

Here are some tips we believe can help develop a niche practice in your agency:

• First, it is often common for agencies to have a niche and not know it. Perform an analysis of your client base by industry to detect any niches already in existence. One way to do this is to run a production report by client and sort by SIC (Standard Industrial Classification) or NAICS (North American Industry Classification System) to determine the industry of each client
• Identify existing niches or niches you want to develop.
• Catalog your capabilities by niche.
• Assemble and maintain a tool kit (assessment, tracking, analytics, surveys, calculators, benchmarking tools, web solutions, vendor relationships, etc.).
• Secure testimonials from clients and develop marketing materials.
• Develop a program to publish and distribute articles, blog, deliver presentations, attend trade shows, etc.

Most importantly, create a target list of prospects, train your producers, and communicate your strategy to all employees of the agency.

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