Did you know there are more than 33 million small businesses in the U.S.? According to the U.S. Small Business Administration, they account for 99.9% of all American business and employ 61.7 million Americans. Many of them also need insurance to manage their risks. To help you capitalize on this huge opportunity, use these four tactics to grow your commercial insurance business.
1. Cross Sell.
You might be surprised to learn how many of your personal lines clients are also business owners.
According to MarketWatch, 54% of Americans have a side hustle. Many of these side hustles involve operating a small business, whether through an online shop or a small catering company.
Whereas starting a small business may be a good way to take charge of your career, it also exposes people to risks, which creates the need for insurance. Unfortunately, many new entrepreneurs are unaware of their insurance needs and options. That’s where you come in. Talk to your personal lines clients to see whether they own a small business or are thinking about starting one and offer to conduct a risk assessment.
This is a great way to grow your commercial insurance business while strengthening your relationships and boosting retention rates with current clients.
2. Develop a Specialty Niche.
According to the Big “I” 2024 Market Share Report, the independent agency channel placed 87% of all commercial lines written premium in 2023 but only 39% of all personal lines written premium.
Since commercial insurance coverage tends to be more complicated than personal lines coverage, it’s unsurprising that business owners seek out the expertise of an independent agent. Developing a niche is one way to show potential clients that you have the experience and expertise to help them manage their risks.
Think about it from the client’s perspective. If you needed insurance for a restaurant, would you rather work with an agent who only sold restaurant insurance occasionally or one who specialized in restaurant risk management and knew the coverage requirements inside out?
By developing a niche, you’ll stand out from your competitors. This may also be a good way to earn a reputation and gain referral business.
3. Access the Excess and Surplus Market.
When insurance companies tighten their underwriting criteria, some businesses can’t find the coverage they need in the traditional insurance market. These businesses often turn to the excess and surplus market.
S&P Global says the U.S. excess and surplus insurance market grew by 32.3% in 2021, by 20.1% in 2022, and by 14.5% in 2023.
As an independent insurance agent, one of two things may happen when a client has needs that only the surplus market can meet:
- You have access to the market and are able to place the coverage.
- You don’t have access to the market, meaning you lose the business to one of your competitors.
When the latter happens, you may end up losing more than one sale. Imagine you have a client whose commercial property insurance policy is facing nonrenewal. You try to place it with other insurers, but no one is interested. Since you don’t have access to the surplus market, you’re out of options. Your client has to go elsewhere for coverage – and she takes the rest of her business with her because she finds it easier to have all her insurance needs serviced in one place.
On the other hand, if you have access to the surplus market, you’ll retain more business. You can also welcome new clients whose former agents couldn’t provide the access they needed, which is a great way to grow your commercial insurance business.
4. Leverage technology.
If you’ve ever thought that you could easily grow your commercial insurance business if you just had more hours in the day, the right tech tools may be just what you need.
Technology won’t make the days longer, but it will free up your time by helping you become organized and streamlining your processes. For example, a good CRM system makes it easy to keep track of clients and follow up, which reduces wasted time.
This gives you more time to focus on activities that will grow your business – like following up with current clients to make sure you’re still meeting all of their needs or increasing the number of leads you pursue.
How Can We Help You Grow? Heffernan Network helps agencies like yours grow. We offer back-office support, innovative technology solutions, and access to top national carrier appointments to support agency growth. Learn more.
