Texas independent insurance agent Gordon Sorrel, credits the power of niche marketing with contributing to the growth his agency has experienced during the last year, despite the soft market and general economic turmoil.
Sorrel’s agency, Texas Insurance & Financial Services Inc., in tiny El Campo — population just upward of 11,000 — has 16 employees and grew more than 10 percent organically last year.
“We work primarily in three niches,” Sorrel said. “We work with landscape contractors, we work with wholesale nurseries, and we work with beekeepers. We have national endorsements.”
Although operating in a small town atmosphere, Sorrel said his agency writes a lot of business both across the state and nationally.
He credits niche business with bringing in a lot of those accounts. “The good thing about writing in niches is you have companies that say, ‘we like this class of business. … It gives you a track to run on and you’ve got markets out in front of you for the business you want to get.”
To achieve success in niche marketing, according to Sorrel, it’s necessary to learn as much about that particular industry or class that you can. “When you’re working in niche markets, you’re actually immersing yourself in it. You want to know everything you can about that industry. You want to learn their weaknesses, their strengths — everything you possibly can because you want to be the expert,” he said.
It’s also important to build upon what you already have or have access to. “We’re in an agricultural area, so it stood to reason that we work in niches that were addressed by agriculture in some fashion — wholesale nurseries, landscape contractors, beekeepers. … One kind of led to the next,” Sorrel said.
Hamann Insurance Group in Katy, Texas, led by Josh Hamann has 22 employees. It, too, has managed to grow organically over the past year. Commercial accounts represent 80 percent of the business in Hamann’s agency, with personal lines bringing in the remaining 20 percent. Out of that 20 percent, around 10 percent is high net worth, Hamann said.
The high net worth personal lines market, which he “stumbled into by accident,” is the newest niche for his agency, Hamann says.
He met a man at his church about a year and a half ago that had his insurance through a captive, and was “grossly underinsured,” Hamann explained. “We ended up writing it with one of our carriers. It ended up being about a $30,000 personal lines account. And I realized, ‘hey, that’s like a small commercial.'”
As a result, his agency shifted its focus away from standard personal lines, partly because of the saturation in the Houston marketplace and partly due to his recognition of opportunity in the high net worth market. The thing about high net worth individuals, Hamann said, is that they “also own businesses, so that was a good leeway into writing their commercial business as well.”
Ark Assurance Group Inc. in Tyler, Texs, has 14 employees. Its property/casualty business runs along a 60/40 split, with personal lines doing the heavy lifting, according to agency principal Criss Sudduth. Sudduth says his producers also have developed niche specialties, among them — RV campgrounds, oil and gas consultants, and churches.
As a result of the downturn in the energy field and the economy as a whole, many oil and gas consultants were losing their jobs at big corporations and going out on their own. The niche was one Ark Assurance fell into after Sudduth got a call from a consultant who had been employed by a company that had been a customer of Sudduth agency. The man was starting out on his own and needed insurance. “So we started on that road,” Sudduth said.
Another niche, the RV campgrounds, developed as the result of a producer being a camping enthusiast. “He goes after RV campgrounds because he has a camper. He’ll go stay in a park for a weekend, hang out with ’em and the next thing you know we’re writing their insurance. It’s worked out real well for him; he’s become the campground expert.” Sudduth said.
Sorrel said his advice to an agency interested in developing niches is to start by looking at the kinds of businesses they have on their books. “See what classes of business you currently write, what you’re good at, what you have markets for. And connect the dots. The next step is to start immersing yourself in that industry. Learn it as well as you can.”
Hamann, Sorrel and Sudduth participated in the panel discussion: “How We Did It: An Idea Exchange for Agency Growth” during the Independent Insurance Agents of Texas Conference and Trade Show, held in Ft. Worth in June.
Topics Texas Agencies Agribusiness
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