niche

 

This is particularly evident within the competitive personal lines insurance market where it has become increasingly important for brokers to identify a chosen niche in which they are comfortable and use these skills and expertise to grow their portfolio. Effective segmentation of a client base also translates directly into improved sales figures and a higher retention of clients. 

 

By segmenting clients and maintaining a focus on a specific niche, brokers can extract the maximum benefit out of their network; establishing themselves and their business, as experts in a particular field; and can start attracting a similar breed of clients, thereby resulting in increased revenue. 

 

Establishing this niche market not only means that marketing and sales efforts are more focused and ultimately more successful, but also that clients are far less likely to move their business if they feel their needs are properly understood.

 

We see this frequently with brokers who specialize in a particular service offering. For example, a broker who specializes in thatch insurance will be far more equipped to understand the risks of their clients and be able to advise them appropriately.  A broker who understands the unique needs of thatched roofed home owners will also be able to provide a client with specialist advice from the time of taking out the policy right through to the event of a fire claim.  Such brokers are also more likely to know the thatching companies and to strike up a relationship for new business referrals to ensure they build a sustainable source of new business leads. 

 

At MUA we have seen this work for a diverse range of client segments.  Some of the top performing brokers are those who have chosen niches such as foreign clients owning homes in SA, high value property home owners or exotic car owners.  These brokers then customise their insurance offerings to suit the needs of their clients. 

 

In addition to the obvious sales benefits of catering to a niche client base, the insurance industry – brokers and insurers alike – will soon be obliged to change the manner in which we conduct our business to be customer-centric through initiatives such as the Treating Customers Fairly (TCF) principles launched by the FSB. 

 

With the opportunity that a specialized service offering presents, there are also challenges that brokers need to be cognizant of. However, it is important to realize that challenges posed by a particular niche can actually prove to be a strength for a business and form an important part of a broker’s strategic differentiator. 

 

For example, high net worth clients demand personal attention and very quick turnaround times, particularly on claims.  Gearing your business model to be able to meet these needs provides an opportunity once again to differentiate your service offering from others around you.

 

In a world where every aspect of business has become increasingly more compartmentalised and focused, it is vital that brokers meet these changing needs. Those brokers who understand the value of having a truly niche approach are certain to reap the benefits.