From attracting better-fit customers to standing out from the competition to offering a better customer experience, there are many reasons why it makes sense for commercial brokers to specialize in a specific niche.
According to Richard Augustyn, CEO of NIP Group, “Specialization allows agents and brokers and MGAs to really set themselves apart from their competitors far beyond the table stakes. Whether the specialization is at the line of business level, at the industry level, or even in a region, it gives them a unique competitive advantage and what you might want to call a sustainable ‘right to win.’” Transitioning from generalist to specialist has broadened opportunities for success for many in the insurance industry.
If you’re trying to find a niche or looking to add an adjacent industry to your book of business, here are five hot industries that are worth considering.
1. Construction
While many industries can fall into this category, we are speaking specifically about skilled construction trades such as electrical contractors, heating and air conditioning (HVAC) contractors, carpenters, plumbing contractors, and interior painting contractors.
Research shows some skilled trades are projected to have above-average growth over the next few years, with construction growth as a whole staying steady. Another source projects there will be over 3 million openings in skilled trades by 2028. As the electric vehicle market begins to take shape, the electrical contractor market will experience a high rate of growth, making insurance for tradesmen a lucrative possibility.
Insurance agents who specialize in insurance for tradesmen have an opportunity to build a “recession-proof” book of business that will supply commissions in good times and bad times. Even during poor economic times, there is always a demand for highly skilled contractors.
Moreover, tradesmen are intrinsically connected to one another through job sites, which will lead to a natural flow of referrals.
Learn about the types of commercial insurance tradesmen need here.
2. Excavation
Growth in the construction industry is continuing to promote innovation within the excavation industry, along with a greater focus on environmental, social, and corporate governance (ESG) nationally. Excavating, digging, and trenching are required for many green innovations such as solar panels, wind turbines, deforestation, water management, and sourcing raw materials. Investors are particularly seeking out businesses vested in ESG initiatives, and these issues are increasing the demand for workers in the excavation industry.
Excavating companies are acutely aware of the dangerous risks that are inherent on job sites. For that reason, the excavation industry presents an audience eager to learn more about excavation insurance.
Excavators move earth every day – often not knowing what dangers lie beneath the surface. The ground may not be properly compacted or the grading for water runoff could be misaligned. Trenches could collapse or heavy equipment could rupture utility lines. No matter what dangerous incidents occur, excavating business owners are on the hook for injuries, fatalities, and property damage, which means specialized knowledge of this industry is essential and make this a great niche for commercial brokers.
Learn about the types of commercial insurance excavator contractors need here.
3. Arboriculture
Arborists spend some of their time on the ground, but you will also find them climbing tall trees. The arborist profession is wrought with risks of injury and illnesses, and the right insurance products give business owners and sole proprietors peace of mind knowing they are protected from the most common types of losses.
Arborists must be certified and professionally trained in the science and art of trees. While trees make up a large part of an arborist’s repertoire, they also assess and treat plants, shrubs, and other forms of plant life.
Arborists obtain certifications, so they have the proper training and experience, as well as vast knowledge about tree life. They must go through a comprehensive examination process to get their certification, and the education does not stop once they receive their certification. It takes years of practicing their craft to become a master at managing the growth and development of trees. Being an arborist requires a high level of expertise, and continuing education enables arborists to stay current with the latest techniques and technologies related to arboriculture.
Learn about the types of commercial insurance arborists need here.
4. Landscaping
As the housing market slows down and commercial demand grows, the landscaping industry should continue to see steady growth despite labor shortages. According to IBISWorld, a rebounding economy and commercial construction will likely drive demand for the landscaping industry, which has been experiencing consistent growth since 2018. Economic conditions may slow the rate of growth down from an average of 8.1% between 2018-2023 to a projected 3.0%, but there are still plenty of reasons to be optimistic about this $176.5 billion industry.
Landscaping companies are prime target audiences for specialty insurance programs, especially as spring approaches and they are busy overhauling equipment, stocking up on supplies, and training their teams.
Learn how to target landscaping businesses this spring – or any other time of the year – here.
5. Greenhouses and Nurseries
Greenhouse horticulture, also known as protected cropping, is a business where horticultural crops are produced within or under a shelter to manage growing conditions and protect plants from insects, diseases, and inclement weather. Plants may be grown in glasshouses or screened houses, or they may have some other form of shade.
According to GlobeNewswire, the greenhouse horticulture market was estimated at just over $32 billion in 2022. This market is projected to grow to over 65 billion by 2030. The largest market share of the greenhouse industry operates in North America and Europe, where the market is very strong and continually growing.
Greenhouses are high-cost investments and though these structures are powerful tools for growing enterprises, risks and accidents do happen, and greenhouses can be especially vulnerable.
Learn the reasons why businesses should insure their greenhouse structures here.
Targeting a niche market takes a little more time and effort in the beginning, but the benefits will pay off eventually. Specializing will help your agency stand out among the crowd and help you garner a reputation for serving a particular industry better than anyone else.
Whether you’re a newcomer or a veteran, a generalist or already a specialist broker, download our in-depth guide now for everything you need to know about focusing on a niche and standing out from your competition in the highly competitive insurance industry.