A diversified book of business can help agents build more resilient, prosperous operations, especially as they trend toward leveraging niches and competition intensifies. For as many agents who are entering into niches, few are doing it effectively. Niche markets are not about agents filling a gap; they must understand where their agency can drive growth, build credibility and prove value to clients.
What are the trends?
Too often, agents jump into a new market without completely committing and lacking a clear plan. Though competition is rising, those agents who dedicate themselves to being a student of their niche and seeking the people and resources needed to help them develop their offerings will be better positioned for success.
Technology can help agents get up to speed on a particular niche, but it is important they remain careful about information they receive and put into artificial intelligence (AI) tools like Google Gemini or OpenAI's ChatGPT. All information received from these large language models (LLM) should be fact-checked as AI can misinterpret information or output false information. Agents must also remember that any information they put into such tools, including client information, can be used by the tool's development company to improve them. They could inadvertently violate a client's privacy or put their own agency's data at risk by adding it to an LLM tool.
While there is no such thing as a perfect starter niche for agents, they should be aware of emerging niches such as cyber, special events, sustainable or green markets and technology companies. Opportunities in emerging markets continue to grow as consumers become more aware of their risks and needs.
Make a choice and follow through
Not every niche will be the right fit for an agency. Agents need to take the time to identify the best choice for their agency, including resources, and then plan to invest in and grow their niches. Consider the following:
- Find the best fit: Agents should start by finding a niche that interests them or connects to a passion. Doing so will help agents commit to developing the niche. They should then ensure there is enough opportunity within their chosen niche. For example, if an agent is passionate about boating but operates hundreds of miles from the nearest marina, it may not be a viable option.
- Do the homework: Succeeding in a niche goes far beyond understanding basic coverages. Agents should work to understand the industry they are getting into, how it operates, related regulations, the client base, challenges, risk factors and more. Having this initial knowledge of a niche will give agents a great jumping off point to provide value to clients, while still learning along the way.
- Build a community: To champion a niche, agents will have to dive into the niche's community and build a network of colleagues and clients. This requires more than simply joining associations and industry groups. Agents need to get involved. Whether in the form of serving on committees, attending meetings, speaking at events or sponsoring relevant initiatives, agents can build credibility by being visible and active. Beyond credibility, industry organizations like SIAA can connect agents to carrier partners who understand and have the ability to support agents' needs within a niche through knowledgeable underwriters. A group like SIAA also provides access to local growth coaches for additional assistance.
A strategy in practice
An agency needs to be prepared to give the time and resources necessary to develop a niche. Agents should have a strategy for how they will implement the niche into their operations, create a team of employees with defined roles who will work on it and communicate a clear plan including how it will be marketed, communicated and benchmarked. It can take anywhere from three to six months for agencies to fully implement a new niche. Agents should take their time through the process, accumulate the necessary background knowledge, invest in their networks and develop a plan to feasibly service and grow a new market.
Niche markets could be an agent's key to developing their agency and maintaining strength in an increasingly competitive market. But those agents who go beyond the surface and become trusted advisors in their niches will benefit from stronger relationships, happier clients and more resilient businesses.
