Last Updated: June 10, 2022

Why Should Independent Insurance Agents Look for Niche Markets to Sell Better?

Selling your products and services to everyone might sound noble and enticing. But as mentioned by reports from IBISWorld, given the steady growth of insurance agencies in the US over the past decade, independent insurance agents need to start focusing on selected niche groups if they are to sustain their business.

Focusing on niche groups will allow you to experience a steady inflow of customers, and help facilitate the building of a professional brand image for yourself and your company. Doing so can also help further expand your reach into other niche markets.

You may find insurance sales tips and tricks that work for most lines of insurance, but they may not work for niche lines. This article is prepared so that you may make better sales strategies for your independent insurance agency. Before you start your journey into targeting and eventually conquering niche markets, it is crucial to understand what a niche market is. 

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What is a Niche Market?

In its essence, niche markets are small, specialized markets for unique products or services. As a smaller segment of a much larger market, they have their own unique identity, needs, and preferences. When it comes to insurance, niche markets can be a cluster of potential customers who share common characteristics. This makes them receptive to the specialized products and services of an insurance agency.    

In insurance, niche markets can be trucking, building contractors, entrepreneurial ventures and startups, restaurants, beauty salons, and more.

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What are the Benefits of Targeting Niche Markets for Independent Insurance Agents?

Each niche market has its own set of specific insurance needs. As per Insurance Journal, niche markets typically yield an above-average profit margin for agents because of their built-in efficiencies. Incorporating a specialized approach to your marketing allows you to be more productive and focused. It also helps in setting clear and precise goals that are aimed towards serving the target market. 

By specializing in niches, agents and agencies can increase the number of their targeted leads, improve their retention and referral rates, as well as improve their overall competitive prowess. Therefore, by focusing intensively on niche markets and devising proper strategies that can cater to their needs, independent insurance agents can exponentially grow their book of business. This allows them to experience long-term success in the field. 

Differentiating yourself in the market also allows you to reduce competition while increasing opportunities. This way, you can stand out as an insurance specialist in the eyes of your customers and the general public as a whole. 

Some of the benefits of niche markets to independent insurance agents are: 

  • Agents and agencies can increase the number of their targeted leads. 
  • Establish themselves as an industry expert. 
  • Differentiate themselves in the market. 
  • Improve their retention and referral rates. 
  • Exponentially grow their book of business. 
  • Improve their overall competitive prowess. 


Why Should Independent Insurance Agents Focus on Niche Markets?

Captive agents are limited to selling only the services that their parent company provides. They unfortunately do not have much wiggle room when it comes to targeting niche markets. This is where it pays to have opted for the independent route.

As independent agents, you have the option to sell various coverages from several insurance carriers. This freedom allows you to be able to cater to the specific needs of your niche clientele. While independent agents can always choose to avail their services to the broader market, opting to focus on a niche market can prove to be the wiser choice in the long run.

You will, however, need to partner with at least a couple of capable and quality carriers that can supply you with the necessary resources. Agents who try to sell to their niches with just one carrier will see their efforts go down the drain in an instant.

Partnering with multiple carriers gives you access to multiple markets. It allows you to cater to your niches at a higher level. As a niche market expert, independent insurance agents can build a credible reputation for themselves. This can serve to widen their range, and ultimately their revenue.

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How Can an Independent Insurance Agent Identify a Niche Market?

Oftentimes than not, niche markets can be found closer to home than one might think. As mentioned, niche markets are found in small clusters, and it isn’t surprising to find them in a social community. Start by looking within your town/city. Local businesses, neighborhoods, academic institutes, etc. are a good start.

Once you’ve identified potential leads, study their behavior, attitudes, and preferences. Some points to take into consideration include:

  • Are the niches substantial enough to focus your efforts on?
  • What could be the insurance needs of these niches?
  • Do your agencies provide the coverage that these niches need?
  • Does selling to your niches bring enough commission for you and your agency?     

Finding answers to these questions can help streamline your approaches moving forward. Preparation and strategy are essential to effective selling.

Make it a point not to pick a target market that is too broad in its definition such as healthcare workers or shop owners. Instead, try to narrow the target down even further. The strategy for an independent insurance agent shouldn’t be to market your services to prospects that ‘can’ use your products and services, but to prospects who are likely to ‘purchase’ them.

Another great way to identify a niche market is to check your existing book of business. Chances are if you have been working in the insurance field for a considerable time, you already have the resources to set a good foundation. Check for commonalities and patterns among your customers. Do some of them have the same line of work? Are some of them small business owners and entrepreneurs? Identifying similarities and then strategizing marketing approaches tends to help you finalize your niche.

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In Conclusion

If you haven’t been targeting a niche market, then you’re missing out on a plethora of opportunities. In the current market scenario, the wise option would be to target at least a couple of niche markets. As an independent insurance agent, you have the opportunity to provide your clients with many more options than a captive agent can.

With the right strategy and guidance, an independent agent can hit a home run when it comes to selling insurance to niche markets.

Find out how you can find your niche market and consequently, more customers by using our insurance directory today.

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