16 Be the agent clients flock toward Establish a niche in the Northeast
23
Differentiate in the hard market
Find more opportunities by specializing
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make your clients happier … you become an expert by default
O increase your agency’s efficiency … you spend your time on areas that you know will be profitable reduce competition … your competition pool becomes smaller if you focus on a group
help you get more referrals … those in the niche will recommend you to others in the niche
Looking to build a niche?
So, you want to develop a niche for your insurance agency. Where do you start? Look at your existing client base Do you have a lot of clients who are focused on a particular industry? Is there a high need for a specific insurance coverage in your area? That’s a good starting point.
Need more direction? Here’s a look at some popular niche markets to consider:
Workers’ compensation
Workers’ compensation benefits are government mandated. Most of the states in the U.S.—including Connecticut, New Hampshire, New Jersey, New York and Vermont—require employers to offer some form of workers’ compensation benefits.
Rather than writing all forms of compensation benefits insurance, consider focusing on one or two types of insurance to sell. Workers’ compensation covers:
Commercial property insurance
Businesses have unique risks, so it’s likely that no two commercial property insurance policies are the same. That being said, if your agency decides to focus on specific types of businesses, you can develop a high level of understanding for their insurance needs.
Professional liability
Independent insurance agents understand the value of errors-and-omissions insurance. Do your clients understand the importance of professional liability insurance? Develop a niche and be the agency that educates them about this vital insurance for professionals.
bakeries
cleaning services
food trucks
grocery delivery services
Builder’s risk insurance
grooming
recording studios
tanning salons
zipline parks
Look around your community. Chances are there’s several buildings under construction right now Do you want to be the agency that people call the next time they need to cover a new building project?
Consider this when you consider a builders’ risk insurance niche, it:
usually is required by lenders, building contracts or government projects
can be either residential or commercial
covers: property damage, theft, materials in transit, vandalism, fire or lightning, windstorm or hail, arson, collapse, drains or sump pumps
The types of people who usually look for this type of insurance include:
This coverage will protect your clients from:
infringement
costs
The types of people who usually look for this type of insurance include:
care professionals
designers
research firms
Niche businesses for niche insurance markets: technology professionals
Happy niche hunting!
Avoid pitfalls when switching to a specialist insurance agency
In this issue of PIA Magazine, you’ll read about the many benefits of developing a niche for your professional, independent insurance agency.
However, if and when you decide to make the transition from a generalist agency to a specialist agency, you should be mindful of some of the difficulties you may encounter.
No. 1: Know the niche inside-and-out before you start selling it. Generalist agencies are great because they can be a one-stop shop for all of a client’s insurance needs. Insurance is a great industry that allows people to learn as they go, from experience, mentors and colleagues. In contrast, when developing a niche, people expect you to be an expert in that field from day one.
If your team members are used to speaking with your clients about all their insurance needs and finding ways to crosssell other insurance products, it’s vital to train every staff member on the nuances of your niche market before you start selling the insurance product.
If you come off as unsure in your conversations with clients, it will be harder to be perceived as an expert in the market. It would be like someone saying he or she is a qualified sailor when the person has never been on a boat.
Additionally—without the proper knowledge—your agency might focus on writing less complex, less risky accounts, which will leave an entire segment of the niche untapped as potential clients.
No. 2: Keep up with market changes. As generalists, insurance agents need to keep track of emerging risks and follow market changes, so they can pivot from one line of insurance to another if the market conditions become unfavorable or more difficult to write.
As specialists, insurance agents also need to track these conditions. However, without the diversity in their books of business they need to have a plan in place if the insurance carriers with which they write business decide to withdrawal from the marketplace, or their underwriting guidelines become more restrictive.
Remember, if one of your carriers withdrawals from a market, you have some responsibilities—which can vary state to state—to your clients, these can include:
• notifying your clients about the withdrawal,
• complying with any regulatory agreements and fiduciary responsibilities, and
• finding replacements for the coverage and transferring the polices.
PIA Northeast can help you keep updated with market changes. Visit PIA Northeast News & Media (blog.pia.org) for the latest insurance news.
No. 3: Be mindful of newcomers to the sector. Like agents, insurance carriers may be looking for ways grow their business by diversifying their insurance products. They may offer a comprehensive insurance product that offers great options to your niche today. However, there’s no guarantee the company will be writing this type of insurance five, two—or even one year from now.
While this might not be a bad thing, it’s important to talk to your clients about the companies that are offering the insurance policies for their needs, then make sure they know that the policy may need to be written with a different carrier later.
Plus, if one of your carriers stops writing business in one of your niches, you’ll need find a replacement carrier, which will take time and research. It might be better to stick with insurance carriers that have longevity in the niche you offer clients. Finally, just like agents who are getting into a niche, a carrier that is new to a niche might not have everything figured out when it first starts writing the business. Be mindful that there may be some growing pains, and make sure to review each insurance policy carefully.
Be aware that the newcomers might not even be insurance carriers, rather they could be other companies that are entering the insurance industry: payroll companies, private equity/hedge funds or technology companies. Do your homework.
Don’t forget to plan
The insurance markets and carrier appetites continue to change, and so to must the professional, independent insurance agency. The evolution from a generalist agency to a specialist agency seems like a logical next step.
As with any business decision there are pros and cons to each action. When deciding whether to establish your independent insurance agency as an insurance provider to a specific niche, you need to review your current business model, and plan for your expansion.
The articles in this issue of PIA Magazine will help you to do that. Keep reading to see if building a niche is right for your agency.
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Navigate the insurance gaps of e-bikes and e-scooters
In recent years, e-bikes and e-scooters—or micromobility vehicles—have taken off across the United States, offering a greener, cheaper and more convenient way to get around, especially in crowded cities and sprawling rural areas. Whether it’s commuters, leisure riders or delivery workers zipping through traffic, these vehicles have become part of daily life.
However, as their popularity grows, so does the issue of insurance coverage. A significant gap has emerged, leaving riders, insurers, lawmakers and the public scrambling to address the risks tied to their use. Without clear policies in place, accidents and liability issues are becoming more frequent, underscoring the need for comprehensive solutions that address both safety concerns and the changing landscape of urban mobility.
The growth of e-bikes and e-scooters
E-bikes and e-scooters have integrated into the daily lives of many Americans. Cities like New York, Boston and San Francisco have embraced these vehicles as a solution to traffic congestion, to reduce carbon footprints, and to provide a cost-effective transportation option. In rural and suburban areas, e-bikes and e-scooters are filling gaps where public transportation is scarce—allowing residents to travel short distances with ease.
While this shift has transformed the way people maneuver, it has simultaneously introduced new challenges—particularly in the insurance and regulatory spheres.
One of these key challenges stems from the direct correlation between increased e-bike and e-scooter usage and increased risk of exposure. According to one study: Between 2017-22, there were approximately 169,300 emergency room visits by e-scooter riders and 53,200 emergency room visits by e-bike riders.1 This breaks down to an annual average of 28,216 e-scooter injuries and 8,866 e-bike injuries, with injury numbers increasing each year. The study also reported 111 deaths from e-scooter accidents and 104 from e-bike acci-
dents during the same six-year period—highlighting the growing risks associated with these modes of transportation.
Insurance gaps and the implications
Compounding this issue is the lack of mandatory insurance for e-bikes and e-scooters, which creates significant risks for the public. Many riders may mistakenly assume that their existing auto or homeowners insurance policies will cover accidents involving these vehicles. Unfortunately, this assumption often leads to financial hardship following an accident, as most policies do not adequately cover e-bike- or e-scooter-related incidents.
One court case that exemplifies the complexities of micromobility insurance is Goyco v. Progressive Insurance Co. In New Jersey, an e-scooter rider who was involved in an accident sought personal injury protection benefits under his auto insurance policy. However, the claim was denied because, under New Jersey law, the e-scooter did not qualify as an automobile, and the rider did not meet the legal definition of a pedestrian.
Consequently, the court ruled that e-scooters are not considered motor vehicles for insurance purposes, leaving the rider without coverage. This case highlights the uncertainty surrounding the insurance status of e-bikes and e-scooters and the pressing need for policies to address their unique risks. In response, the New Jersey state Senate introduced S-2292 in the Senate Transportation Committee, to propose that low-speed electric bicycles and scooters (i.e., those traveling 20 mph and under) be registered with the New Jersey Motor Vehicle Commission and that operators be required to carry PIP, liability insurance and uninsured motorist coverage.2
Without proper insurance, not only are e-bike and e-scooter riders vulnerable, but so too are pedestrians, bicyclists and motorists who may be injured in accidents involving these vehicles. The financial burden from medical expenses, property damage and lost wages often falls on the victim,
exacerbating the public safety risks posed by the lack of comprehensive insurance coverage.
The need for regulatory oversight
The regulatory landscape for e-bikes and e-scooters is inconsistent—as there are no standardized, comprehensive guidelines for insurance, registration or licensure across the 50 states. This lack of uniformity forces individual states and municipalities to develop their own distinct policies, resulting in a fragmented patchwork of regulations that can vary significantly from one location to another.
A clear example of this can be seen in New York, where state lawmakers— particularly those from New York City—introduced several legislative proposals during the 2024 legislative session. These initiatives would establish state-level regulations concerning mandatory insurance, licensure and registration of micromobility vehicles on city streets.
Right now, there are a few laws in New York City that address these vehicles.
For example, Law 72 of 2020,3 prohibits the operation of e-bikes and e-scooters in certain public areas, allowing for enforcement by the New York Police Department and imposing civil penalties for violations.
On the other hand, Local Law 73 of 20204 took a more inclusive stance by granting e-scooter and electric-assist bicycle operators the same rights and responsibilities as traditional cyclists, integrating these vehicles into New York City’s broader traffic system.
This contrast between state-level proposals and localized city regulations not only highlights the lack of consistency in how e-bikes and e-scooters are governed, but also has ripple ef-
Without proper insurance, not only are e-bike and e-scooter riders vulnerable, but so too are pedestrians, bicyclists and motorists ...
fects throughout the supply chain— particularly impacting the insurance marketplace. The absence of uniform regulations creates uncertainty for insurers, agents and consumers alike, which complicates efforts to design insurance products with adequate coverages for these emerging forms of transportation.
Implications for insurance producers
Insurers have been slow to adapt to the growing market for e-bikes and e-scooters, leaving many riders in a precarious position. According to anecdotal evidence from PIA agents and brokers, some insurance producers have started covering e-bikes and e-scooters under existing policies for similar vehicles, such as mopeds. However, this approach is not a long-term solution. E-bikes and e-scooters have unique risks that differ from mopeds,
and covering them under these insurance policies can lead to complications if an accident occurs.
Insurance agents and brokers have voiced concerns about the lack of standardized insurance products for these vehicles. Without clear guidelines, agents often are left to navigate a complex and ambiguous market. This creates challenges not only for agents, but also for consumers, who may not fully understand the coverage they are purchasing or the risks to which they are exposed.
Conclusion
As e-bikes and e-scooters continue to gain traction across the United States, the need for a comprehensive insurance framework becomes increasingly urgent. The current gaps in coverage leave riders, pedestrians and other road users at risk—while insurance agents and companies face uncertainty in developing appropriate products.
Policymakers and insurers must collaborate to create regulations and policies that ensure these vehicles are accompanied by the necessary protections. Addressing these gaps is no longer an option—it’s a necessity, both for the safety of the public and for the stability of the growing e-bike and e-scooter market.
Alexander is PIA Northeast’s government & industry affairs specialist.
1 U.S. Consumer Product Safety Commission, 2023 (tinyurl.com/yzajvf4d)
2 State of New Jersey, 221st Legislature, Senate, No. 2292 (tinyurl.com/yck7hm56)
3 Local Laws of the City of New York for 2020 (intro.nyc/local-laws/2020-72)
4 Local Laws of the City of New York for 2020 (intro.nyc/local-laws/2020-73)
JOHN CHAPIN President, Complete Selling
Build strong customer relationships
In a recent survey, customers said that the No. 1 reason they do business with a particular business is because of a relationship with someone within that organization. The same survey also showed that 97% of customers did business with a particular salesperson because they liked and trusted that person.
Thus, as salespeople, having a strong relationship in which people like and trust us is more important than any other factor in the sales process. It is more important than product performance, service and even price. So, how can we ensure that we are building strong relationships and that we are likeable and trustworthy?
Five steps to strong customer relationships
No. 1: Focus completely on the customer and how you can help. Customers always come first, and your primary objective is to help them—even if that means, dare I say—sending them to the competition. Granted, most of the time you’ll have a solution, and you shouldn’t be looking for reasons to send the customer to the competition. At the same time, you must have the level of commitment to the customers in which you are willing to do whatever you must do to help them out. This leads to my next two points.
No. 2: Stay on your toes and do what you say you’ll do. You have a customer and you’ve started to build a solid relationship, you have to keep the ball rolling in the right direction. This means staying on top of things and continuing to have a high level of commitment to your customers, you can’t take them for granted once you have them signed on to your agency. Also, continue to build trust and credibility by doing what you say you’ll do when you say you’ll do it. Call when you say you’ll call, and send items when you say you’ll send them.
No. 3: Go above and beyond. The next step in building a strong, positive relationship is to go above and beyond what the customer expects. Do more than people expect and deliv-
er more than the customer pays for. Words to keep in mind here are: more, better and different. How can you deliver more, how can you be better, and how can you be different from your competitors. This is the one that really builds trust and credibility and builds long-term, happy customers. Always look for ways to surprise people—in a good way.
No. 4: Good, solid communication. Correct, continuous communication is a key to solid, long-term customer relationships. If you fall out of communication for too long, people begin to forget about you, and the relationship begins to deteriorate. Also, if there is a miscommunication—or incorrect communication—the relationship can go downhill rapidly. Ask people how often they want to hear from you
Ultimately, we want all our customers to be loyal customers and friends. Treat customer relationships as if they are relationships with close friends and family members and nurture them in similar ways.
and in what form, be it phone, text, email, written letter, or other, and then communicate clearly in the frequency and medium they expect.
No. 5: Continue to build the relationship. Once you have a strong foundation in place, continue to work on and build the relationship. This includes
getting personal information on customers, as well as sharing some of your own. Once you have that information, you want to use it. Send out holiday, birthday and anniversary cards. Send out items such as articles, books and gifts related to their areas of interest. Continue to ask questions that will
help you understand your customers better—both personally and professionally. Ultimately, we want all our customers to be loyal customers and friends. Treat customer relationships as if they are relationships with close friends and family members and nurture them in similar ways.
Takeaways
Follow the five steps outlined in this article and you will build strong customer relationships in which your customers know, like and trust you.
The bottom line: If you care more about your customers than anything else and treat them right, they will continue to do business with you, send friends and family to you, and you will never have to worry about having enough business. Also, your life will most likely be happier and more enjoyable.
Chapin is a motivational sales speaker, coach and trainer. To have him speak at your next event, go to www.completeselling.com. He has over 36 years of sales experience as a No. 1 sales rep and he is the author of the 2010 sales book of the year: Sales Encyclopedia (Axiom Book Awards). Reach him at johnchapin@completeselling.com.
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Wherever you are on your journey as an independent insurance agent (start-up, existing, moving away from captivity, or simply seeking a way to start or expand a commercial lines book of business), we can help.
Learn how joining our community can help take your insurance career to the next level. siaa.com info@siaa.com
Be the agent clients flock toward
Establish a niche in the Northeast
DREW YANCEY, PH.D. President, InCite Performance Group
In the highly competitive insurance landscape of the Northeast, agency principals continuously seek ways for their agencies to stand out from others. With major players dominating mainstream markets, many independent agencies in the PIA Northeast footprint can find success by focusing on niche markets. This strategy allows them to cater to specialized needs that often are overlooked by larger competitors, leading to a dominant presence within their chosen segments.
The niche market advantage in the Northeast
Operating in a niche market involves targeting a specific subset of clients with unique needs that may not be addressed adequately by larger, more generalized providers. The Northeast, with its diverse economy and population, offers a rich landscape for identifying and providing services for niche markets. For example, agencies might specialize in insuring high-value coastal properties in New Jersey, providing specialized coverage for the unique risks associated with living in areas prone to hurricanes and flooding. Alternatively, agencies in New Hampshire and Vermont might focus on writing insurance in the agricultural sector, offering tailored policies for farms and agribusinesses.
The key advantage of operating in these niche markets is the reduced competition. By offering specialized products or services, agents can position themselves as the go-to provider for these specific segments. This not only fosters greater client loyalty, but also allows agencies to withstand competitive pressures from larger firms that may not have the same depth of expertise in these areas.
Establish expertise and build trust
To establish a foothold in a niche market, it is crucial for agents to position themselves as subject-matter experts. This can be achieved by deeply understanding the specific needs and risks associated with the niche. For instance, an agency specializing in insuring brownstones in dense urban areas like Brooklyn can distinguish itself by comprehensively understanding the unique construction, historical value and associated risks of these properties. By offering customized insurance products that account for these factors, such an agent can build strong trust-based relationships with property owners who may feel underserved by larger, less specialized insurers.
Similarly, in Connecticut’s Fairfield County, known for its affluent communities, agencies might focus on high-networth clients, providing bespoke insurance solutions for luxury homes, fine art collections and high-end vehicles. By catering to the specific needs of this clientele, agents can position themselves as experts in managing the unique risks associated with high-value assets. This expertise not only helps in gaining new clients, but also in retaining them over the long-term, as these clients are likely to stay loyal to providers who understand and can manage their unique risks.
In rural New Hampshire and Vermont, where the economy is heavily dependent on agriculture, an agency could focus on insuring flowers, shrubs, dairy farms, maple syrup pro-
The Northeast, with its diverse economy and population, offers a rich landscape for identifying and providing services for niche markets.
ducers or organic farming operations. By offering coverage options that address the specific challenges faced by these businesses—such as crop failure, livestock health and farm equipment breakdown—agents can build trust and loyalty within the farming community. These relationships often are more personal and long-lasting, as they are built on a deep understanding of the clients’ livelihoods and the specific risks they face.
The role of technology in niche market mastery
In the digital age, leveraging technology is essential for agents who seek to dominate niche markets. Advanced data analytics and customer relationship management tools enable agents to gain deeper insights into their niche markets. By analyzing data on client behavior, preferences and risk factors, agents can tailor their products and marketing strategies more effectively.
For instance, an agency specializing in insuring high-networth clients can use predictive analytics to anticipate the needs of these clients before they even express them. This proactive approach not only enhances client satisfaction, but it also strengthens the agent’s position as a trusted adviser. Additionally, digital platforms allow agents to reach their target audience more efficiently through targeted marketing campaigns, social media and personalized email communications.
The use of technology also extends to policy management and claims processing. For niche markets that require specialized coverage, such as insuring rare and vintage vehicles, technology can streamline the underwriting process by incorporating detailed risk assessments based on historical data and predictive models. This not only reduces the time taken to issue policies, but it also ensures that the coverage provided is accurately aligned with the client’s needs.
Dominate the market segment
Once an agency has established itself as an expert in its niche, it can leverage this position to dominate the market segment. Having a deep understanding of a niche market can set an agency apart from both local competitors and national players. The key to dominating a market segment lies in consistently delivering value that is unmatched by competitors.
For example, agencies that specialize in insuring small, family-owned businesses in local neighborhoods can develop tailored products that address the unique risks these businesses face, such as liability issues arising from high foot traffic or the challenges of operating in historic buildings. By focusing on the specific needs of these clients, agencies can become the preferred provider, leading to increased market share within this niche.
In New Jersey, where extreme weather events like Superstorm Sandy have heightened awareness of the need for specialized insurance, agencies that offer expertise in coastal property insurance can dominate this market. By providing tailored risk assessments, flood insurance options and storm recovery
planning, these agents can build a reputation as the leading experts in coastal property protection. This reputation can be further reinforced through community engagement, such as hosting seminars on disaster preparedness or offering free risk assessments to potential clients.
Another critical aspect of dominating a niche market is developing strong relationships with industry influencers and partners. For example, an agency specializing in insuring historic properties might collaborate with preservation societies, architects and contractors who specialize in restoring historic buildings. These partnerships not only enhance the agency’s credibility, but they also provide a steady stream of referrals from trusted sources within the niche.
Challenges and considerations
While the benefits of operating in a niche market are evident, agency principals in the Northeast must also consider the challenges. Niche markets, particularly in smaller states, may offer limited growth potential compared to more extensive mainstream markets. Additionally, the regulatory environment in the Northeast can be complex and subject to
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Despite the challenges, the long-term benefits of focusing on a niche market are significant. Agents who establish themselves in a niche market often enjoy higher profit margins ...
change, particularly in states like New York, where insurance regulations often are stringent and evolving.
To mitigate these risks, agents should consider diversifying within their niche or exploring adjacent niches. For instance, an agency specializing in insuring historic homes in Connecticut might expand its offerings to include policies for the preservation of these properties or provide risk management services tailored to historic property owners. By doing so, the agency can increase its revenue streams while still maintaining its focus on a specific market segment.
Another consideration is the potential for saturation within a niche market. As more agents recognize the value of niche markets, competition within these markets may increase. To stay ahead, agents must continuously innovate and enhance their value proposition. This could involve developing new products, expanding service offerings or incorporating emerging technologies that offer a competitive edge.
Moreover, agents must be mindful of the potential for economic shifts that could impact their chosen niche. For example, an agency specializing in insuring the hospitality industry may face challenges during economic downturns when travel and tourism decline. To safeguard against such risks, agents should maintain a flexible business model that allows them to pivot to other niches or expand their services to accommodate changes in market demand.
The long-term benefits of niche markets
Despite the challenges, the long-term benefits of focusing on a niche market are significant. Agents who establish themselves in a niche market often enjoy higher profit margins due to the specialized nature of their products and services. Additionally, these agents are more likely to build strong, loyal client relationships, as clients within niche markets tend to value expertise and personalized service.
The trust and loyalty cultivated within a niche market also can lead to organic growth through referrals and wordof-mouth marketing. Satisfied clients are more likely to recommend an agency to others within their community, leading to a steady stream of new business without the need for extensive marketing efforts. This organic growth is particularly valuable in niche markets in which clients may have close-knit networks and a strong sense of community.
Furthermore, agents who dominate a niche market often can command higher premiums, as clients are willing to pay more for specialized expertise and tailored coverage. This not only boosts the agency’s revenue, but it also enhances its reputation as a leader in the industry. Over time, the agency may become the preferred choice for clients within the niche, further solidifying its market position.
Conclusion
In the competitive Northeast insurance market, independent agents who operate in niche markets have a unique opportunity to differentiate themselves, reduce competition and dominate their chosen segments. By understanding the specific needs of clients, establishing themselves as experts, and delivering exceptional value, these agents can build strong, lasting relationships and create a sustainable competitive advantage. For agency principals looking to secure their future in the industry, the path to success may lie not in competing with the giants of the mainstream market, but in finding and owning their unique slice of the market. The future of the insurance industry in the Northeast is likely to see continued consolidation among larger firms, making it even more critical for independent agents to find and excel in niche markets. By doing so, they can not only survive but thrive, building a business that is resilient, profitable and respected within their communities.
Yancey, Ph.D., is president of InCite Performance Group, one of the leading advisory firms to the insurance agency industry. Reach him at drew@incitepg.com.
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STEVE TOMBARELLI Senior vice president of programs and services, SIAA
Find more opportunities by specializing Differentiate
Insurance is a business of opportunity, but when conditions like a hard market take hold, opportunities can seem limited. However, even in today’s hard market, opportunities await the enterprising and steadfast independent insurance agent.
Agents who are willing to seize opportunity in today’s market can find ways to grow their businesses. The industry is seeing exclusive agency channels contracting, and direct channels leveling off—while technological advancements are creating a more equal playing field across the insurance distribution system. Simultaneously, clients are recognizing the value an independent agent brings to the process in terms of expertise and coverage options. Due to this and other factors, the independent agency channel is experiencing growth in terms of premium and the number of agencies.
Still, independent agents are grappling with ongoing challenges impacting their businesses. Insurance company appetites are posing a challenge as carriers will not write policies in certain areas, limiting agents’ options. Consumer buying habits also are changing in both personal and commercial insurance, calling upon agents and their staff to have a deeper understanding of market conditions. And, staffing remains an obstacle as agents struggle to attract and retain talent.
in the hard market
While the challenges independent agents face do not have a one-size-fits-all solution, opportunity lies in diversification. To manage market shifts and hurdles, agents should look to diversify their product and service offerings and to expand into specialties.
The keys to niche market success
In recent years, we saw that personal lines entered the hard market more quickly and rebounded more slowly than commercial lines. Having a balanced book of business with both personal and commercial lines, depending on the market cycles, can enable agents to generate revenue and clientele to maintain, and possibly to grow, their agencies—even in undesirable conditions. In addition to strategies like cross-selling and upselling or expanding to new geographic areas, independent agents should explore how niche markets can add revenue streams to their agencies, expand their clientele and offer staff new opportunities.
Exploring niche markets requires some preliminary work with potentially sizeable returns for agents who are invested in seeking out and following through on opportunities. Consider the following best practices to help those who are interested in adding a niche to their book of business:
Do the research. Agents should narrow down a list of specialties to about two or three options. That way they can account for any market shifts. Research might include using online and peer resources to scope out how much opportunity is in a particular niche, how popular it is within an agency’s geographical limitations, what service needs would be involved and how much additional opportunity there is once an agent is comfortable in the niche. For example, in the restaurant niche, agents might find additional opportunities with commercial kitchen equipment manufacturers and/or linen supply companies. Industry colleagues will be a crucial source of information to understand market potential and popular niches in an agent’s location. Agents also should identify the carriers that are writing and supporting a particular niche—ideally two to three—to ensure they are aligned with a carrier partner that is well-versed in the space and can be a resource. Carrier resources and relationships will have a huge impact on agents’ ability to familiarize themselves with a niche, and market it properly.
Competition is another key factor agents should consider in their specialty search. One niche may seem like it has considerable client potential, but several agencies in an area may have saturated the market. It is vital to understand how competitors are performing, and which carriers are supporting them.
Get involved. When trying to enter a new niche, relationships are paramount. Agents should seek out the organizations and groups that support a particular niche, join them and most importantly, get involved to demonstrate the value of the agency in those communities. For example, if agents are interested in exploring the restaurant industry, they should consider joining their local restaurant association or restaurant-owner networking group.
Agents should prioritize finding ways to get in front of decision-makers—including business owners or executives— within the sector. Too often, agents join such groups for the sole purpose of gaining access to their list of members, when they should be joining committees and boards, interacting with members and showcasing their expertise when appropriate. When members see agents participating in an organization, it helps the agents stake their claim as a resource in the community as more than salespeople.
Prepare your team. It can take time to be fully ready to brand your agency as an expert in a particular specialty, and doing so too soon can harm an agency’s reputation. Agents should prepare their teams by ensuring they are aware of carrier relationships, know what is expected of them in terms of the service provided, have time to understand the market
When trying to enter a new niche, relationships are paramount. Agents should seek out the organizations and groups that support a particular niche, join them and most importantly, get involved ...
and more. Consistent branding is another important factor for agents to ensure clients see that staff are aligned with one another, the carriers they work with and the agency.
Carriers will be an invaluable resource in getting staff up to speed on a niche, as many offer training, seminars and guides. There also may be training resources available via third-party organizations specializing in the space, and industry organizations worth exploring.
One of the most significant mistakes agents make when adding niches to their businesses is not educating their teams about them. These agents are often ill-equipped to manage the incoming business, answer questions comfortably and maintain consistency. Taking the time to prepare as an agency can help ensure new clients have a positive first impression of the business, and current clients are not left behind. And remember, training within an independent insurance agency will be an ongoing process. Regular checkins with team members—especially while they get familiar with a new niche market—can help identify areas they may need more training on or help communicating with clients.
Keeping changes smooth
Adding a new service offering to an agency will likely come with some growing pains while staff get acquainted with the new business. A communications and marketing plan
can help team members maintain contact with clients to ensure none are neglected while staff onboards a new niche business. A plan might include sending informational emails with market updates or offering check-in meetings on a regular cadence to ensure touchpoint opportunities. Social media also is an important medium, as agencies can showcase how they are involved in the community, share industry news and highlight charitable endeavors that help them maintain a connection with clients. A planned schedule can help agents stay ahead of their social-media accounts, and strategize posts to address client needs. Beyond checking in with clients, agents should make certain their customer service representatives are prepared to sell to existing customers. When any staff member talks to a client, he or she should explore for additional needs and potential coverage options. Agents should never underestimate the growth potential of their current client base when bringing a new niche into an agency. Clients who own businesses or participate in niche-oriented communities might not actively share aspects of their life that do not relate to the services their agents have provided historically. Talking points can be a helpful tool for staff to prompt questions and dig a bit deeper with clients on the phone.
Existing clients also can be a key source of referrals within a niche community—if they have influence in their segment. For example, if a particular client has a good relationship with an agency for his or her personal insurance needs, he or she has a reason to trust the agent and the staff. Agents should ensure their team members are fostering relationships with their existing clients and considering potential referral opportunities.
New spaces, new business
There is a world of new business to be written out there for innovative agents willing to invest in their agencies and look to the future. Adding a niche market with the backing of expert carriers and informed and consistent team members could be exactly what an agency needs to power its future.
Tombarelli is the senior vice president of programs and services with SIAA, where he oversees revenue-generating programs available to SIAA member agencies. He has 30 years of sales, sales management and leadership experience. Reach him at steve.tombarelli@siaa.com.
Vertical specialization—where insurance producers focus on specific industry sectors, niches or lines of business—is quickly gaining ground as an approach for accelerating growth. It has proven to enhance client retention, build efficiency and foster innovation—leading to a competitive advantage and better business growth.
Benefits of specialization
The insurance industry is facing a hardened rate environment, and market access challenges due to escalating risks— like extreme weather events or cybercrime. In addition, the insurance workforce is declining and there’s an ongoing battle for talent. Many agents and brokers who are considered generalists are starting to experience limitations with that approach as clients seek those with deeper knowledge around specific industries and risks.
Here are some insights into specialization and why more agents and brokers are using it to help drive growth and expand their business:
Improve client relationships. When you choose a specific niche, you’ll move from being perceived as a vendor to someone who is a strategic resource. Specializing allows you to better understand your clients’ needs, risks and questions. It also helps you get better at recommending coverage, risk management strategies, and implementation of tools and resources that address their unique needs. As your expertise grows, you’ll also attract the right clients and offer a better overall client experience.
Drive organic growth. When your clients are satisfied, they are more likely to retain your services, buy additional products and recommend you to others. You also can target your marketing to more specific industry publications, trade associations and network groups. With specialization comes endless opportunities to showcase your authority and expertise.
Increase efficiency. Spending time in one sector saves time and money since you can focus on those industries that yield
the best results. When all your clients are similar, you tend to work with just a few carriers, policy types, resources or contacts. This efficiency also leads to better productivity in your producers and other staff.
Strengthen industry relationships. Focusing on a singular niche can strengthen communication and relationships with carriers that specialize in specific types of businesses. For example, carriers might be more willing to create a special program for an agent due to the amount of business he or she brings to the company. Building positive relationships with industry associations and groups also generates more business for an agency.
Stay competitive. Serving specific industries (instead of all industries) means competing with a smaller pool. Differentiating your business by delivering tailored products can enhance your place in the broader market. If you remain a generalist while others are specialized, it may be tougher to bring in new business. In fact, most of the insurance brokerage world has shifted toward this model and, according to our research, specialists grow at a faster pace than generalists.
How to find your specialty
Establishing expertise within one or more industry verticals is a key ingredient to specialization. When planning your insurance specialization, start by looking at your existing book of business. You may find you already write a few firms in a similar industry. This is a good place to start. Alternatively, what business is in your footprint to write? Restaurants? Agriculture? Hospitality? Nonprofit? Many agencies and brokerages have industry vertical specialization but they don’t know it. The fact is—if you write one nonprofit you are a generalist. But if you write two, you are an expert. Use the power of your diverse client base and the data you capture and maintain to drive industry vertical expertise within your firm.
Consider your business’s strategic goals, expertise and market opportunities to choose a niche in which you can make
impact your vertical. Staying one step ahead will demonstrate your expertise to clients.
These are the Workers’ Comp Markets You’re Looking for!
Specialization is no longer a nice-tohave—it’s a necessity for differentiating and competing in this business. Vertical specialization offers your clients customized solutions and deeper expertise, and it will help your business move from a transactional relationship to a consultative business partner that clients can trust.
a difference. Then, look for patterns. Find sectors that have more consumers, emerging risks or unique needs.
Perhaps you’re passionate or personally experienced in a particular niche. Look at the unique talents, interests and backgrounds of your producers. Do they possess any unique skills or knowledge, like language or cultural background? This can energize your producers, making them more satisfied in their specialized roles for bringing in new customers.
Most importantly, assess your progress as you go to ensure you’ve selected the right industry. Don’t feel committed to one area permanently—you can adjust based on results, or if another vertical presents an opportunity that better fits your skills.
Best practices for specialists
Shifting your business to be more specialized will take some careful strategizing. The first step is to build your knowledge in your targeted industry or line of business. Reach out to carriers that specialize in those areas and get their insights on the industry. Some carriers prefer to work with specialized agents and offer training seminars on industry topics. Get the right talent onboard to provide service to these clients and to enhance your agency’s credentials even further. Then, create a targeted marketing strategy by placing ads on the platforms your clients use most.
Staying knowledgeable long-term is key. Explore events, compliance changes and new challenges that currently
Refici joined MarshBerry in 2021 as a vice president within MarshBerry’s Financial Advisory team. His current responsibilities include acting as a client-facing lead on merger & acquisition and financial consulting projects, developing strategy and implementation of client deliverables, and recognizing opportunities for growth that enhance client satisfaction. Founded in 1981, MarshBerry is a global leader in financial advisory and consulting services serving the insurance brokerage and wealth management industries to help clients grow and advance their business strategies. With locations across North America and Europe, MarshBerry market-sector expertise includes property/casualty agents & brokers, employee benefit firms and specialty distributors, partners in InsurTech, capital markets and insurance carriers, as well as registered investment advisers, retirement planning and life insurance firms. Clients choose MarshBerry as their trusted adviser for every stage of ownership to help them build, enhance and sustain value through Financial Advisory solutions (investment banking; merger & acquisition advisory, debt & capital raising, business consulting), growth advisory solutions (organic growth, aggregation, leadership, sales & talent solutions) and market intelligence and performance benchmarking.
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Stopgap insurance, baseball card collections and more
Agent’s legal duty at the time of procurement of insurance coverage
Q. What is the requisite standard of care for insurance producers at the time of procurement of coverage?
A. At the time of procurement of coverage, the standard of care for insurance producers under Connecticut law is the reasonable skill, care and diligence to see that a producer’s client has proper coverage during the relevant time period and in similar cases.
This standard has been incorporated into Connecticut’s judicial branch civil jury instructions. See Civil Jury Instructions, 3.8-7 Insurance Agent Malpractice (May 6, 2024), [Ursini v. Goldman, 118 Conn. 554 (1934); Dimeo v. Burns, 6 Conn. App. 241 (1986); Todd v. Malafronte, 3 Conn. App. 16 (1984)]. Additionally, according to such civil jury instructions, any negligence or other breach of duty by an insurance producer who defeats the insurance that he or she undertakes to secure renders him or her liable to his or her client for the resulting loss.
Connecticut law imposes upon an insurance agent an obligation to perform with reasonable care the duty he or she has assumed, and as such an insurance agent may be held liable for loss properly attributable to his or her breach of such obligation. A producer acts negligently if he or she fails to obtain the insurance requested or fails to notify the client of his or her inability to do so.
These three leading Connecticut decisions [Ursini, Dimeo and Todd] concern only an agent’s duty at the time the agent initially secures coverage. There is no equivalent Connecticut case law or jury instruction as to the requisite duty of an agent at the time of automatic renewal of an insurance policy. However, extra-jurisdictional decisions support the application of a lesser duty at automatic renewal, the scope of which varies by jurisdiction [Cleary v. Country Mutual Insurance Co., 63 Ill. App. 3d 637, 638 (Ill. App. Ct. 4th Dist. 1978)]. The Cleary case found that the law does not impose on an insurance agent the duty of reviewing the adequacy of an insured’s coverage each time a policy is due for such
renewal. Further, Gabrielson v. Warnemunde, 443 N.W. 2d 540, 544 (Minn. 1989), found that “Once a policy has been issued, the insurance agent has only a limited duty to update the insurance policy. The agent has no ‘ongoing duty of surveillance’ or obligation ‘to ferret out at regular intervals information which brings policyholders within the provisions of an exclusion.’”.
As this issue has not been directly addressed by Connecticut courts, the scope of the agent’s duty at the time of automatic renewal presents an issue that should be carefully considered under the facts and potentially raised.
Additionally, while there is a duty of care for insurance agents, currently, Connecticut law does not impose a fiduciary duty on insurance producers. State courts also have upheld this, with the caveat that such a duty could be determined to exist by a court upon review if it meets a requisite heightened standard. In the recent case Perry, a U.S. District judge denied an insured’s claim of breach of fiduciary duty against an insurance agent and an insurer, citing Connecticut court history and the notion that “[a] mere contractual relationship does not create a fiduciary or confidential relationship.” [Perry v. Gov’t Emps. Insurance Co., 3:22-cv-910 (KAD) (D. Conn. March 10, 2023)—citing Essex Insurance Co. v. William Kramer & Associates LLC, 331 Conn. 493, 508-09 (2019)].—Danielle Caswell, Esq.
Healthy Homes Fund surcharge
Q. How much is the Healthy Homes Fund surcharge? Is it per policy or per named insured?
A. The surcharge is $12.
In 2018, Connecticut passed legislation to offer financial support to homeowners with houses that had crumbling foundations caused by the pyrrhotite in the concrete. Due to the high cost of replacing the foundation and coverage exclusions in homeowners policies, the state Legislature created the Healthy Homes Fund to provide grants of up to $175,000 per affected home, which is funded by a $12 surcharge on insurance policies. When signing the legislation, then-Gov. Dannel Malloy raised several concerns
regarding the language of the law and the intent to the Legislature. Included in those concerns was the language that charged a surcharge to each named insured rather than to each policy.
In 2019, the law was amended to clarify that the surcharge applies to each policy, and the first-named insured has the responsibility to pay the surcharge
upon the commencement or renewal of the policy.—Bradford J. Lachut, Esq.
Stopgap insurance
Q. Could you explain “stopgap” insurance? How is it provided?
A. A client may need stopgap coverage if workers’ compensation insurance is placed in the monopolistic state funds
of North Dakota, Ohio, Washington and Wyoming. These states do not offer the employers’ liability component of a National Council on Compensation Insurance workers’ compensation policy.
Sometimes, stopgap coverage for employers’ liability can be purchased as an endorsement to a commercial general liability policy, although the wording and provisions of this coverage are not necessarily identical to the employers’ liability language of the workers’ compensation policy.
If the employer has a workers’ compensation policy applicable in another state(s), the insurer may be willing to endorse it with the Employers Liability Coverage (WC 00 03 03; or WC 34 03 01 for Ohio) endorsement to provide only employers’ liability coverage in the desired monopolistic state.—Dan Corbin, CPCU, CIC, LUTC
Insurance coverage for baseball card collections
Q. In the Insurance Services Office Inc.’s HO-3 policy, is there coverage for a baseball card collection? Our insured has a collection that is valued at about $35,000 and our carrier won’t schedule it. What should we do?
A. There is no limitation or exclusion for the baseball card collection in the ISO HO-3 policy, so it would be covered for its actual-cash value along with other personal property, subject to the applicable Coverage C limit.
However, the insured may need documentation of the collection’s value, such as an appraisal, in order to ensure full settlement of a claim.—Dan Corbin, CPCU, CIC, LUTC
PIACT 2024-2025 Board of Directors
OFFICERS
President
Nick Ruickoldt, CPIA
The Russell Agency LLC
317 Pequot Ave. PO Box 528
Southport, CT 06890-0528 (203) 255-2877
nruickoldt@therussellagency.com
President-elect
Kevin P. McKiernan, CIC, CPIA Abercrombie, Burns, McKiernan & Co. Insurance Inc.
484 Post Road, Ste. A Darien, CT 06820-3651 (203) 655-7468
