Where could you be generating more revenue? As an independent insurance agent faced with direct writers, a hard market and changing carrier appetites, this is a question you need to ask yourself to maintain and grow your business consistently. It starts with creating and maintaining diverse revenue streams.

More Carriers
In a hard market, you’ll be working to grow your insurance agency as well as maintain your existing accounts. As markets shift, so do the appetites of carriers. A rise in premiums or a decision to stop writing certain business entirely by one or more carriers can have a serious impact on your livelihood.

Make sure you are working with the right carriers and enough of them. Working with more than one or two carriers means you and your customers have more options. This also provides an opportunity to pass along savings to customers, adding value to the relationship. This same diverse carrier mix also offers you options if one or more of those carriers exits a market that is important to your business.

Too Niche?
Independent agents who choose to go niche and who also lack diverse revenue streams tend to struggle in a hard market. While expertise and specialization can drive explosive growth in a soft market, rising premiums and reduced capacity can be limiting.
For example, if you rely too heavily on auto insurance and premiums rise, the risk of direct writers luring your customers away with lower cost options can cut off a previously key source of income.

If you’re looking to diversify your existing book of business beyond your specific niche, explore writing more commercial lines of business. If you’re heavy into personal lines, this is a great counterbalance to your revenue portfolio. You can also consider offering life or health insurance as well. Marketing these types of policies can be done through third parties or digitally if you don’t want to invest significant time up front.

You can distinguish yourself among a sea of generalists by specializing and, in turn, building a strong book of business. However, you don’t want all your eggs in too few baskets. So, in addition to offering one or two niche lines of business, you would do well to offer other, more diverse insurance products and services that will insulate you from a shift in any one market.

Finally, by maintaining a broad portfolio of insurance products and services to complement your niche specialization(s), you can deepen your customer relationships. This can help you add new customers as well as cross-sell to your existing customers. It’s also often easier and more efficient to generate revenue with existing customers than finding, connecting with and selling to new customers.

Working with multiple carriers, accentuating your niche offerings with some general capacity and deepening your customer relationships is the smart way to grow your business.