After years of navigating higher premiums, stricter underwriting and reduced capacity, the insurance industry is on the verge of another market shift. Throughout late 2024 into early 2025, signs of a softening market emerged.

Unfortunately, the industry has already faced significant challenges this year, with the Palisades and Eaton fires in Southern California causing tens of billions of insured losses. While these losses could complicate mid-year reinsurance renewals, the insurance industry is moving closer to a soft market and agents should be prepared for a new era of growth.

When the market softens, competition will intensify. Agents will need to balance client retention and new opportunities. A well-executed marketing strategy that integrates both traditional and digital tactics can help agents solidify their client base while expanding their reach. Now is the time for agents to refine their approach, enhance client communication and take full advantage of incoming opportunities.

Here are five ways to prepare for a softening market:

1) Strengthen client retention with proactive communication. Customers who feel valued beyond their renewal date are more likely to trust and stay with their insurance agent. Schedule check-ins with clients to review coverage needs, discuss market changes and address client concerns. This reinforces trust and demonstrates commitment to your clients' best interests. Beyond policy reviews, agents should provide clear, relevant educational content to help clients better understand the insurance process and stay up to date on changes in the market.

Communicate with clients through their preferred channels. Whether via phone calls, emails, text messages or social media, agents should understand how their clients want to hear from them. Personal touches, such as birthday greetings or anniversary messages, can further strengthen client relationships and foster loyalty.

2) Leverage technology to provide a personalized experience. Digital tools can help agents maintain a high level of service and improve efficiency. Artificial intelligence (AI)-powered customer relationship management (CRM) platforms, for example, can help track client interactions, flag renewal dates and suggest tailored policy recommendations based on past behaviors and preferences. Chatbots can schedule appointments, answer frequently asked questions and streamline claims processing, allowing agents to focus on higher value tasks.

Additionally, AI features—often included in a CRM—can analyze historical data to predict which clients are more likely to shop their policies. This allows agents to reach out proactively with retention-focused messaging before a competitor does. Data-driven marketing also enables agents to pinpoint the most viable prospects and craft personalized messages. However, agencies must maintain high-quality data to ensure efficient outreach efforts, reducing wasted marketing dollars and increasing conversion rates.

3) Utilize digital marketing to expand reach and strengthen brand awareness. A strong digital marketing strategy can establish credibility while attracting new leads. The foundation of any agent's online presence is a well-designed, fully optimized website. It should be user-friendly and include unique content and clear calls to action that guide visitors to request quotes or consultations.

Search engine optimization (SEO) and content marketing can further enhance visibility, making it easier for potential clients to find agents online. By maintaining an active blog that covers industry trends, coverage advice and common client concerns, agents establish themselves as trusted resources in the insurance space.

Social media platforms like LinkedIn, Facebook and Instagram provide valuable opportunities for engagement. Just like on an agency's blog, sharing client testimonials, behind-the-scenes insights and expertise on social media fosters trust and credibility. Additionally, running targeted digital ad campaigns on social media platforms and Google allows agents to get in front of potential clients actively searching for new policies.

4) Don't overlook traditional retention and acquisition methods. Alongside the rise of digital marketing, traditional marketing remains an essential part of an effective strategy, particularly for relationship-driven industries like insurance. Personalized direct mail campaigns can reinforce connections in a tangible way. Sending thank-you notes, policy reminders or educational brochures provides clients with a physical touchpoint that complements digital interactions.

Also, networking and community engagement continue to be powerful tools. Sponsoring local events, attending industry conferences and staying involved in the community increase brand visibility and trust. And remember, happy clients make the best advocates. Referral programs that offer incentives generate high-quality leads.

In commercial lines niche markets, cold email and outbound telemarketing can be successful. When leveraging such tactics, agents must understand the businesses they are targeting by industry, size and geography. Of course, access to multiple key decision makers and providing them with strong messaging will drive better results and more opportunities.

5) Position for growth. While retention is crucial, a changing market also presents a chance for agents to grow their books of business. As policyholders begin to shop for better deals, agents who effectively communicate their value beyond price will gain new clients.

To stand out, agents should emphasize their personalized service, claims advocacy and proactive risk management strategies. Clients aren't just looking for lower prices, they want an adviser who understands their needs, helps protect their interests and provides long-term value. Targeted outreach can also help agents connect with dissatisfied policyholders impacted by prior rate hikes. By combining the power of email campaigns, digital ads and telemarketing, agents can position themselves as a better alternative and attract new business.

Bundling and cross-selling opportunities offer additional growth potential. Clients looking for savings may not realize the potential discounts available, so agents should proactively review clients' coverage portfolios to identify upselling opportunities and educate them on any options that provide better value.

The transition from a hard market to a soft market presents both challenges and opportunities for insurance agents. A strategic approach to client retention and acquisition will help agents navigate market fluctuations while strengthening their competitive position. By embracing a mix of time-tested strategies and modern marketing innovations, agents can safeguard their client base and position themselves for growth—even as market conditions fluctuate.

Larry Neilson is managing partner at Neilson Marketing Services.