Finding a Niche for Your Independent Insurance Agency Is Critical to Growing Your Business…Or Why Expanding as a Generalist Just Isn’t Practical

February 19, 2020

Would you drive past three towns to bank, or would you choose to do business with one that is local to where you live and work? Many independent agencies go back generations, working side-by-side with their local business associates as part of the fabric of their community. Many still operate that way and earn a decent living – while others are finding it necessary to adapt to an industry being disrupted, or are simply seeking ways to grow their client base and write new business.

It’s fairly difficult to break out of your local geography if you don’t have a specialty. Most people who are open to a new insurance agent for their home, auto or small business needs will opt to do business with someone who is local to where they live and work, or they will go online.

So, what’s the growth path forward? You could buy or open another location and duplicate your strategy. Theoretically you could keep doing this over and over, but that’s a lot of work and not every location may share the same results to the same strategy.

More logically, you may want to find an area of specialty. Become an expert in something for which people will seek out your expertise. This can be in the form of a commercial area of focus, whether it be trucking, health care, manufacturing, farms, or really anything you are capable of becoming an expert in the unique coverages, and for which you have some solid markets.

  • Step 1. Look through your existing book of business and see if you already have the beginnings of a niche. Your agency may already be consistently winning certain types of accounts.
  • Step 2. Where do you have a foundational understanding to build on? Expertise is key and some industries have very complex coverages. In some cases, lack of knowledge can be overcome with good partners and a strong passion for learning, but try and start with an area in which you have some experience.
  • Step 3. Make sure you have the markets. Putting all your eggs in one carrier basket can be a risky proposition. Markets disappear, appetites change. Do your homework in advance of any major strategic investments.

Finally, a niche marketing strategy does not always have to be commercial in nature. Do you have enough access and clients to support catering to the affluent market? Do you know car collectors? Are you bilingual? Leveraging your existing strengths is key to finding a unique value proposition that can carry your agency across geographic borders.