Reducing Risk and a Well-Rounded Book — Expanding Your Insurance business
As an insurance provider or broker, you might have decided to specialize in a particular type of insurance. On one hand, that makes good sense, right? You’ve got expertise in a particular area, so you can give top-notch service and advice to your customers. But, by sticking to just one or two types of insurance and customer, you could be severely limiting your business growth, and no-one wants that. You don’t want all your eggs in one basket.
Diversification is smart.
Reducing your risk and liability, because no-one thrives on too much adrenaline. Insurance is all about managing risk, both for the carrier, and for you as an agent.
If you break into new specialties or areas you’re spreading the risk that something bad will happen in a particular area or for a certain type of insurance. For example, if you’re just insuring residential property in coastal Florida, and a hurricane hits — That’s a massive impact to your business. You can diversify via location, types of industry, or lines of insurance.
Expanding your business base, because you want to turn your revenue stream into a river. Selling insurance in more areas means more sales, which means more profit. There are probably only a handful of people who need insurance for their art collection, so it’s great to be an expert in this field – but make sure you are insuring all their lines of business! Their auto, home, workers’ comp, business insurance. Diversify, Diversify, Diversify.
It gives you lots of new marketing opportunities, especially with existing customers, which brings us neatly onto our next point.
Cross-selling and upselling, because just getting new customers is hard… One of the best things about having a variety of insurance lines is the ability to cross-sell and upsell them to existing customers. For Personal Lines – ensure you have home, auto and umbrella for all clients where applicable. For your commercial clients – do you have all lines of business and have you offered them life insurance and benefits?
The more you expand your book, the better these cross-selling opportunities become — It’s like a virtuous circle of insurance joy.
Better for your customers, because what’s good for them is good for you. Finally, having a more rounded book is better for your customers. They can buy all their insurance in one place, and have a single point of contact for all their insurance needs. That reinforces your brand, builds trust with your customer, and helps you stand out from your competitors. Well-rounded books have a much higher retention rate. And that’s pretty great.