High inflation, rising premiums, and increasingly severe weather have made personal lines less stable than before. As this market volatility increases and personal lines become riskier, more agencies are starting to think about diversifying their books of business. One way to do this is by adding small commercial lines to existing personal lines services to increase both stability and agency growth. In this blog, we’ll go over some of the ways small commercial lines can benefit your agency and how you can approach adding commercial lines to your book of business.

Why Diversify Your Agency’s Book of Business?

In addition to balancing out the increasingly precarious personal lines market, diversifying with small commercial lines also gives you a variety of advantages. Let’s take a look.

With small commercial lines, you can:

• Increase client retention: Offering commercial insurance in addition to personal insurance makes it easier to cross-sell to your current clients. This, in turn, can improve retention as insureds are more likely to stay with agencies that can offer the products they need in multiple areas.

• Grow your business: When independent insurance agents add small commercial lines to their services, they can tap into a whole new market segment where satisfaction with the services from commercial insurance providers remains high among small businesses, making for a strong investment. The share of profits also tends to be greater for commercial than personal lines. Adding commercial lines is a smart way for agencies to increase revenue quickly.

• Stand out from competitors: Adding commercial lines allows agencies to attract customers who weren’t even interested in their insurance products before. And if prospects are looking for multiple types of insurance, the fact that they can get all of those – both personal and commercial – in one place at your agency helps you stand out from the crowd as a more convenient option.

Getting Started with Small Commercial Lines

Now that we’ve gone over the benefits of increasing diversification by adding small commercial lines to your offerings, let’s look at some steps you can take to begin building your commercial lines business.

To start building your small commercial lines business, you’ll need to:

• Get up to speed on the new areas you're interested in: Before committing to specific commercial lines offerings, you’ll need to study industry trends and terminology. Get familiar with the different types of commercial lines and identify your customers' pain points. This will help you become a trusted advisor in the commercial lines market and enable you to offer clients the services that best meet their needs. When you fully understand the market and what your customers want, you’ll also be able to choose the commercial lines business that is most likely to be profitable for your agency.

• Form strong carrier relationships: Carrier relationships have a significant impact on your agency’s success. Establishing close ties with trusted carriers in the commercial lines market or partnering with a carrier network is key to building a successful commercial lines business. To do this, you’ll want to look for financially stable carriers that can give your clients good prices and excellent customer service. Once you’ve found the right carriers, focus on developing a solid relationship with that carrier’s staff and making sure you fully understand which types of commercial lines they can support.

• Develop a plan for selling and servicing your new lines of business: Once you’ve done your research to determine which small commercial lines products you want to offer, you’ll need to develop a plan for selling and servicing those products. Your plan should include a list of the functions your agency will need to carry out to be successful, such as quoting, marketing, offering renewals and cross-selling. After identifying these functions, the next step is to create a list of the tools and software products that will help you carry out these tasks. To get you started, here are some tools that can make it easier to sell and service small commercial lines:

• EZLynx Sales Center™ allows you to get more insight into your sales pipeline to sell and close deals more effectively.

• Retention Center® helps agents touch 100% of renewals and uses automation and analytics to keep retention.

• EZLynx Communication Center™ gives you everything you need to market your products and build client relationships, from text messaging to email marketing campaigns and automated personalized messaging for special dates like birthdays and renewals.

• Tarmika™ delivers single-entry small business commercial quoting. Enter basic info once and connect directly to carriers to receive real-time quotes.

• Ask Kodiak® is a search engine for commercial insurance products and the single place to manage commercial lines appetite and eligibility information.

• Market your new LOB to customers and prospects: As with marketing for personal lines, when you’re advertising your new commercial lines, you’ll want to promote your services across channels, including over social media sites like LinkedIn, Facebook and Instagram, as well as through email marketing campaigns and paid ads on sites like Google. In addition to promoting your small commercial lines services to new customers, letting your current clients know that you’ve expanded your offerings is also important. These customers already know and trust your services, so they’re much more likely to go with your agency before another if they need commercial lines services.

Let’s Review!

Right now, the hard market is making it more challenging for insurance agencies to succeed, especially with personal lines alone. When independent agencies diversify their products by adding small commercial lines, they can more easily adapt to the shifting market and weather setbacks affecting their personal lines business. Commercial lines also provide excellent profit potential. Agencies offering personal lines can tap into their current customer base by cross-selling small commercial lines while also appealing to a completely new commercial lines customer segment. The insurance market is tough right now, but diversifying with small commercial lines can keep your agency growing now and into the future.

Want to learn more about getting started with small commercial lines?

Watch our webinar, Small Commercial Quoting Simplified, and see how small commercial quoting can help your business.