Maximize Revenue with Niche Commercial Lines
Get ahead of the competition by focusing on writing business that interests you. Have you thought about focusing on writing a niche class before? Odds are, probably not given a McKinsey study showed that “54% of independent agencies don’t specialize in a specific industry at all.” But why not, when those that focus on niche markets have faster growth rates and prove to be more profitable? Safe to say, we are all looking for a way to be more efficient and effective to grow and increase profitability.
Let’s talk about the process of diving into niche markets:
1st: Pick the Niche
When deciding on a niche market to target, think about what you have previous experience in, are interested in now, or subject, you would like to know more about. It’s always easier to learn things when you are passionate about them. That hobby you do on the evenings or weekends (farming, boating, photography, etc.) can quickly turn into a niche market for you. You may already have a solid understanding of challenges and exposures specific to that type of business. Also, keep in mind what markets your carriers write and write well because that will be profitable in the long run.
2nd: Identify Key Partners
After selecting your niche market, while keeping in mind that niche should also be a class of business your appointed carriers want to write, you now need to identify who your key partners are in this niche market. Narrow down your partner carriers to two or three you know will write the selected niche and write it well, including the exclusive coverages you need for that business class. You’ll also need to build your referral network. Lean on organizations you are involved in or can get involved in based on the niche class you have decided to target.
3rd: Become the Expert
After selecting a niche and identifying key partners, it’s time to expand or refine knowledge on the topic to become the expert. If the chosen niche is photographers, you should know:
- What cameras do they like to use
- What other equipment is needed
- How do they transport said equipment
- How do they store their equipment
- What is the most frequent loss exposure
- What is the most significant loss exposure
Your knowledge base should include detailed information about every single component of the line of work. This in-depth knowledge will help prepare you to write this type of business and allow you to communicate with these clients on a deeper, more understandable level, so they feel you genuinely get their needs. This knowledge makes it helpful in assessing what coverages and endorsements are needed and possibly exclusive to their type of business. Again, if we are talking about photographers:
- Do they have Professional Liability Coverage if a client sues them for not getting “the right angle”?
- What happens if they accidentally take a picture of someone without their permission?
- Does their business property coverage include ALL their equipment (cameras, lenses, memory cards, computers, backdrops, etc.)?
Ultimately, it comes back to knowing the ins and outs of the desired niche and building a brand around being the expert for the said niche market.
4th: Write the Business
After all this prep work, it is time to start writing the business. While we identified our key partners (to include referral partners) in Step 2 and should be continuously working with those referral partners to generate leads, there should be additional target marketing campaigns running directly to prospects as well. For these campaigns, leads can be generated through vendors; we happen to have a relationship with miEdge for commercial line leads at Assure Alliance and SIAA. Next, put the leads into a campaign management software offered by vendors like Agency Revolution, Zywave, or LOLA Systems to help automate the marketing process, driving leads to the agency from multiple angles. Having several marketing arms established along with expertise and the right carrier partners is a quick way to get premium on the books, leading to maximized relationships with strategic partner carriers and higher profitability for the agency overall.
Expanding your knowledge on target marketing and building one’s expertise in classes is something we at Assure Alliance and SIAA strongly believe. We invest heavily in the Business Insurance Advantage Program (BIA). BIA is a virtual online course available to our member agencies to help them get on the right track of writing business not only they want to write but that our partner carriers will want to write.
Be efficient, be practical and maximize your revenue opportunities by having a targeted approach to commercial lines in niche classes!