Whether you’ve been a broker in the business insurance industry for one year or 10 years, chances are you’ve heard something about choosing a specialization, or niche. It’s a hot topic these days, and for good reason. Niching offers a variety of benefits – all of which lead to more clients and steady business growth.
But first, let’s get clear on what it means to choose a niche.
Niching down is picking a specialized segment of the market to focus your efforts on. This specialization might be a line of business, a particular industry, or even a geographic region. This gives you what NIP Group CEO Richard Augustyn calls a “sustainable ‘right to win.’”
Here are five reasons that brokers who specialize can be more successful than someone who is trying to be everything to everyone.
- Stand out from the competition.
There are plenty of insurance brokers who can help anyone and everyone. This results in a high level of competition because everyone is going for the same clientele. There’s likely very little differentiation between brokers and you potentially lose out to bigger names, bigger agencies, or simply because you didn’t stand out enough.
- Attract better-fit clients.
When you choose a specific niche, you get to understand your target audience and their pain points very well. You can answer their specific questions and clearly define how your insurance offerings can meet their needs. These business owners don’t need general insurance – they need a policy that meets their unique needs.
- Become known for your expertise.
Gaining expertise in a niche sector’s challenges and exposures will help build your agency’s authority and reputation, increase referrals, and strengthen retention. You move from a transactional relationship to a consultative business partner that clients can trust.
- Gain more marketing opportunities.
When you have a niche, you can also target your marketing to more specific industry lists, trade associations, publications, industry shows, and sponsorships. You can join Facebook groups and follow specific accounts on social media that may offer more opportunities to showcase your expertise and build your reputation as a niche broker.
- Offer a better customer experience.
Every business owner knows that customer experience can make the difference between someone choosing you – and staying with you – or going to another broker. One of the biggest and ultimately most rewarding reasons to choose a niche is because it enables you to use data and expertise to help your customers and offer a better experience.
“You also start to build valuable data sets that allow you to examine, analyze, make better and faster decisions, and ask the right questions. The last thing a broker wants to do is answer 30 standard questions… use your data, use your expertise to ask the 3-5 questions that matter the most,” Augustyn said in a recent episode of AM Best TV.
How to Choose Your Business Insurance Niche
Now that you’re on board with choosing a niche, the best place to start is looking at your existing book of business.
Ask yourself these questions:
- Do you see any patterns?
- Are there any sectors that stand out as having more customers than others?
- Are you more passionate about or do you already have more expertise in one sector than another?
- Have you noticed any opportunities or trends in existing sectors that might have unique needs that you could jump on before everyone else?
Other ways to determine your niche might be talking to underwriters about trends they’re seeing, keeping an eye on legislation and laws that might affect certain industries, and doing your research to explore complementary or adjacent industries to the groups you currently work with.
Regardless of what niche you choose, know that it may be tough at first to turn down business outside of your target market, but it’s essential to stay focused when you’re becoming a specialist.
For more benefits of specialization and tips for how to find your niche, watch this Special Presentation from AM Best TV, featuring Augustyn and other industry experts.