Despite the headlines, small businesses are actually growing—which means there are ample opportunities for independent insurance agents.
There is constant coverage of how small businesses are struggling during these times. So why would independent agents enter the small commercial insurance market? Well, despite the headlines, small businesses are actually growing. In 2020, Americans filed paperwork to start 4.3 million businesses, a 24% increase from the year before, according to the Census Bureau, and applications are on pace to be even higher this year.
This data demonstrates that there are ample opportunities for agents—they just need to target the right prospects. While some sectors, such as restaurants and salons, faced hardships during the pandemic, others thrived. For example, landscaping companies, liquor stores and drive-in movie theaters were just some of the sectors identified by the U.S. Chamber of Commerce that saw growth.
To find these prospects, an agent can simply look in their agency management systems (AMS). Using data analytics, agents can find current customers who also own businesses. By incorporating technology solutions into their AMS, agents can connect with these clients via email, phone and video.
Here are three ways to successfully grow your commercial lines book:
1) Enhance your AMS. The AMS is important, but it only has information from the agents' point of view. There are likely some gaps where customers haven't shared the whole story.
Identify tools that will pull information from third-party databases. These can give you a 360-degree view of a client's situation. For example, perhaps a personal lines client never mentioned that they owned a business as it wasn't relevant for their auto policy. Technology solutions can review business license information and identify that the client is a business owner, as well as confirm the type of business.
2) Woo prospects with competitive quotes and expert knowledge. Having a prior relationship gets your foot in the door. But customers won't switch agents and change policies just because they like you. You have to come armed with information and advice to demonstrate your value. Utilize analytics to identify coverage gaps. Does a restaurant now have outside tables, generating different needs for its business owners policy? Has a landscaper hired five more gardeners, creating a need for workers compensation insurance?
Also, play up your expertise in particular sectors. If you've worked with delivery services, tell your clients—you know the ins and outs better than a generalist. Come armed with quotes and expertise.
3) Turn insights into policies. A lead is just a lead if you don't follow through. However, manually pursuing every opportunity is inefficient because it takes too much time. Explore email solutions that enable you to send personalized communications to multiple leads at the same time using just a single template. Some tools will automatically create messages when an opportunity is uncovered.
Then, partner with carriers that make the purchasing process easy and provide a modern experience. For example, digitally focused insurers enable customers to buy a policy with a click of a button, giving customers an on-demand experience.
There's a lot of bad news out there, but there's good news in the commercial lines market. Data analytics and automation can uncover a wealth of opportunities, enabling you to quickly build a small commercial book of business.
Luis Pino is founder and CEO of Agentero, a digital insurance network. Before starting Agentero, he was a member of the founding team for CoverWallet, the small business insurance platform that was acquired by Aon.