How agencies can grow their book of business
Written By: Becca Parks, Product Marketing Manager
In recent years, there has been tremendous growth in the creation of newly “born” companies, or what we’ve all come to refer to as startups. As innovation through technology impacted almost every facet of the US economy, these new businesses increased by more than 21%, with over 679,000 new businesses established since 2015.
But what does this increase in entrepreneurial spirit have to do with insurance agencies? As personal lines become more commoditized, identifying new opportunities in commercial lines is critical to agencies remaining competitive. These startups are a prime target for agency diversification and growth.
What are some of the most common insurance issues these new companies face that agencies can solve?
Underinsured New Businesses
Today, it is fairly commonplace to find new businesses that are underinsured. To get a business up and running, basic insurance – such as general liability and workers’ compensation – must be in place. However, without guidance from an insurance agent with established expertise in multiple lines of business, business owners do not receive the proper coverage. Moreover, business owners often search for insurance coverage online, without ever receiving guidance from an agent, which also results in underinsurance. According to Marshall & Swift/Boeckh, 75% of businesses in the United States are underinsured by 40% or more. In most cases, underinsurance doesn’t hurt the new business, and the result of this isn’t noticeable until it's time to make a claim. It becomes a severe issue when major issues or disasters arise. In fact, 40% of businesses never reopen after a disaster because they’re not properly insured.
Business Owners Lack the Time for Guidance
Another common trait of new businesses is that owners often have to wear many hats and handle all aspects of the business just to keep it afloat. This leaves them with little free time – so when they are ready to purchase insurance, agents must be ready to provide guidance in a matter of hours, not days. In order to be prepared with this expertise, agents need the right tools in place – tools that provide quick access to searchable, relevant coverage and policy information with trusted and accurate insurance information. Without these solutions in place, agents struggle to quickly gain the knowledge and expertise needed to close the deal.
Providing Guidance & Coverage
To address the market opportunity resulting from the growth in new and underinsured businesses, insurance agencies should branch out beyond personal lines and push themselves into specialty and commercial lines. By gaining the knowledge necessary, agencies can tap into these new markets; expertise will allow agents to provide customers and prospects with complete, comprehensive coverage and maintain a strong base of loyal, satisfied customers.
In a commoditized market where consumers often view all insurance providers as the same, agencies can distinguish themselves by offering customers and prospects an experience that ensures proper coverage. By leveraging tools that give them the insurance information they need, agencies have the opportunity to capitalize on a growing generation of business owners. Recognizing the importance of staying competitive, adapting to technological changes in the market and branching out beyond personal lines will help agencies grow their book of business and remain competitive.