In today’s landscape, forward-thinking agencies and brokers should avoid taking a one-size-fits-all approach by only targeting the general insurance market. The market is heading toward specialization, and the next step to insurance industry success is identifying a niche.
It may seem like such specialization would limit broker and agency opportunities—why not cast the biggest net, right? However, this is not exactly true, as finding a niche allows brokers to become experts in a particular field, develop stronger client relationships, improve workflow and build a stronger client base.
A McKinsey report about agents of the future supports the picture of an insurance industry that needs to increasingly rely on specialization. According to the report, the industry “will need to develop new strengths and capabilities, and a value proposition that is compelling for both carriers and consumers.” They’ll accomplish that by bringing unique product expertise and their own network of clients and prospects, and “thrive with well-articulated value propositions targeted at a small number of customer segments across those personal and small commercial lines that require more specific advice, tailored products and a greater degree of service.”
Operating as a specialist gives independent brokers and agencies opportunities to improve business. By embracing specialization, brokers will no longer have to learn a small amount about a lot of industries; and by being deeply knowledgeable about a specific industry, brokers will be able to make human connections valued by customers and colleagues alike.
Becoming the Go-To Expert
Knowing the ins and outs of an industry is essential in order to speak with authority on a topic. Specialization establishes credibility, speeds up workflow and increases productivity because an agency fundamentally streamlines its processing due to the similarities between specialized clients.
It’s natural for a new employee to take some time to learn the industry and become accustomed to completing their professional tasks. A broker’s proficiency on Day 1 looks much different than at six months or a year down the line. Eventually, tasks become more polished and continuous. The process is a professional muscle memory increasingly becoming more efficient; as brokers and agencies gain specific product expertise, the learning curve will be far less steep with each new, distinct client. [See related article: Selective Disruption in the Insurance Industry.]
The more quickly a broker becomes acclimated, the sooner they can focus on completing new business opportunities and renewal application processes while also building relationships with specific carriers and underwriters.
Becoming Specific and More Profitable
Insurance agency and independent broker specialization allows the professional to get to know industry players and the specifics of what kind of coverage a business needs. As an expert in a given industry, a broker will better understand the complexities of the process to be able to give knowledgeable advice. For example, homeowners insurance is different than insuring your car, which is different than insuring a startup. If your profitable tech startup based on proprietary AI is unsure about what coverage you need, tech specialists are your first call.
From a client’s perspective, most insurance policies have exclusions that you might not know about unless you have a broker or agency helping you through the process. Specialized brokers and agencies can key in on where businesses might be exposed and what policies each business needs. Targeting these sorts of emerging markets or technologies allows you to build your agency around a profitable niche.
Empowering Strategic Sales and Marketing
Agency or independent broker specialization within specific industries means they’re able to tailor their marketing needs based on first-hand observations. At the same time, they can adapt sales tactics to fit what is most important to the industry in the moment. [See related article: Applied Systems has agreed to acquire digital insurance technology startup Indio Technologies.]
Also, such specialization fosters naturally developed networking through industry events and meetups. For example, any specialized insurance broker that puts in face time at events will get to know key players simply due to the need for insurance and lack of expertise that’s often found.
Word-of-mouth recommendations might seem old-fashioned, but they organically build individuals into go-to insurance representatives to what will eventually be major industry players, vendors, distributors and more.
Owning Your Zone
Finding a unique niche empowers you to effectively own a particular space while a larger group is left fighting over the general ground.
Zero-in on particular businesses that operate largely in the region where you live and take advantage of it by specializing in that given field. If your current clients and the market lean toward certain customer segments, these can be broken into coverage type or similar accounts to group key niches together.
If you gravitate toward clients in certain industries, make sure to put yourself in contact with those people more often. Within your niche you’ll be able to talk about the latest news in a client’s industry, particular pain points and exciting developments, as a way to connect with clients that are looking forward to implementing those changes.
Republished with permission from Carrier Management, the online and print publication for P/C insurance carrier C-suiters.
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