The Digital Transformation of Insurance
Gaining Success Through Specialization
July 10, 2013
The insurance industry is changing rapidly. Insurance organizations face competitive pressures, market demands and government regulations. Insureds are more sophisticated and informed than ever before.
Given these trends, the natural inclination for insurance agencies may be to become generalists and ensure that agents have broad expertise in every type of product and coverage. However, that may not be the best course of action.
On the contrary, the most successful insurance organizations of the future will likely be those that choose to specialize. Through specialization, an insurance agency can differentiate itself from competitors by providing in-depth and unparalleled expertise in one particular area — essentially dominating that niche.
In essence, specialization means an agency develops a practice area comprised of agents with in-depth knowledge of an industry, business or personal lines. Agencies can then take a position of thought leadership, thereby offering information and insights to their clients.
At Hylant Group, we maintain a team of generalists, as well as specialized resources, including agents with a specific area of expertise. Our specialization is broken down by specific client industries — manufacturing, financial or legal services, for example — or by having agents focus on certain business lines, such as aviation, executive risk or environment.
Here are four key steps to becoming a more specialized insurance organization:
#1: Identify the focus area(s)
Determine which areas to specialize in by evaluating the agency’s portfolio. For example, an agency with many healthcare industry clients might choose to specialize in medical malpractice. If an agency has a wealth of knowledge in this area and a large portfolio of clients in the industry, it is likely in a strong competitive position to hone that area of expertise. A critical factor, however, is ensuring that the agency and its agents are passionate and knowledgeable about their areas of specialization.
#2: Become an expert
Next, immerse the agency and specialized agents within the focus areas. Encourage and invest in continuing education for agents in their area of specialization. Ways to do this including tapping into resources of carriers such as educational tools and product knowledge, along with industry resources such as risk assessment tools.
#3: Manage change
Managing change can be challenging because it may entail forgoing revenue from previously core business lines in order to focus on building a book of business around the specialization areas you have identified as growth areas for your agency. However, embracing change and helping employees understand and manage it is essential to making specialization work.
#4: Embrace technology
Technology is instrumental to supporting agency processes. Content management systems can be instrumental in helping agencies keep clients updated on changing laws and regulations in their specialized areas. Cloud technology, robust web sites and management systems integrated with self-service tools can be leveraged to break geographic barriers, reach customers across time zones, and serve as a source of information – any time of the day.
How does or could your agency use specialization to differentiate or maintain a competitive advantage?
Scott Lindsey is chief technology officer at Hylant Group, a full-service insurance brokerage with 14 offices in Ohio, Michigan, Illinois, Indiana, Tennessee, and Florida. As a member of the Worldwide Broker Network, Hylant offers complete risk management services, employee benefits consultation, loss control, healthcare management and insurance solutions for businesses and individuals. Hylant is one of the largest privately held brokerage firms in the United States and serves a wide variety of clients locally, nationally, and internationally.