Target the Right Carrier for Income Growth

Target marketing – this is a term I know you’ve heard a million times. And I’m sure the prospect of reading yet another article on the subject has you ready to click away.

Wait!

How Do You Choose A Carrier?

I don’t want to talk about target marketing! At least not in the sense that you usually think. I’m not concerned here with finding a subset of customers with similar demographics.

What I want to briefly discuss is targeting your markets. In other words: Targeting insurance companies. 

What I mean is do you target certain companies for certain kinds of business? Growth objectives? In other words, do you have a plan to write a certain amount, or a certain kind of business with certain carriers? Or do you just put it with whoever is cheapest?

The Right Way to Target

Be honest. I find that most of us do the latter. But I don’t think it’s the best way to grow an agency. The best way, I think, is to collect companies that fill a niche for our agency and then give them only, or mostly, that kind of business.

For example, if you had a carrier that you had an outstanding loss ratio with, and they announced a killer restaurant program, would you write restaurants with them? I probably wouldn’t. Because I know restaurants (pardon the pun) burn up carriers. They are a guaranteed loss generator. I’d look for a different market for them and protect my loss ratio. I’d target my carrier for low losses.

Do you have a monoline auto company that doesn’t pay profit sharing? Of course you do. Why give them your best auto business? They don’t pay you any more for that business than the marginal business, do they? No. So, why not put that business with the carrier who pays a bonus?

My point is simply this: target where you place business based on your business objectives, and not just price, and your income will grow much, much faster.