The National Association of Insurance Commissioners says there were 5,965 insurance companies in the United States in 2019. I suspect the number may be even higher. There is massive competition with the presence of small, medium, and big market players. Small business-focussed insurance agencies need to make their mark by offering their customers services beyond the insurance policies. These agencies need to function as trusted advisors to the small businesses they cater to. They need to apply the personal touch in every conversation to understand the possible risk and complications in a range of varied situations to offer the best solutions to the consumers.
Especially when it comes to serving the needs of small businesses, you want to craft insurance options that are pitched just right. They must cover everything that is important but should not go further to save premium costs. This means being able to craft options absolutely optimal options while leaving nothing out. Too little is too much of a risk and too much will be too expensive. That’s why one of the essential qualities to be effective in this space is local knowledge.
Need of Local Knowledge
Every industry and business sector has its share of complications and risk factors attached to it. We propose different types of insurance coverage available based on the risk evaluation and industry type. This is normal but there are other factors to be explored to offer more relevant insurance options to the consumers. Some of these include product/service characteristics, operating experience, market fluctuations, external environmental factors, etc. With the addition of a dash of local knowledge, the insurance company can analyze all the applicable factors to design the aptest policies for their clients.
Local knowledge provides a better understanding of the market situations. The combination of local knowledge and market information can enable insurance agencies to guide the client better. Local knowledge is also essential from the legal and regulatory compliance perspectives. Many a time, the big brands and nationwide players fail to adequately factor in locally applicable legislation or policies. They can’t anticipate the problems that will arise when a new law is passed locally – it never occurs to them to keep up with those developments until disaster strikes. This may cause major challenges at the time of insurance claims. Small business-focussed insurance companies with relevant local knowledge can design policies keeping all such factors in the mix.
Business insurance can be further classified into different categories. Some of these include commercial building insurance, commercial auto insurance, retail stores insurance, worker’s compensation insurance, and others. Coverage needs, risk factors, and possible damages vary based on one type to the other. Local knowledge available with the insurance agencies can allow them to factor in their in-depth analysis of local conditions and design effective policies with clear terms and specifications.
Benefits of Local Knowledge
Improved Customer Experience
Businesses constantly make an effort to achieve improved customer experience and satisfaction. In that context, for the insurance industry, it is not sufficient to just design and deliver the insurance policies to the customers. Agencies need to go one step beyond to make sure that the requirements and specifications of the customers are met as per their environment and business needs. Local knowledge can enable small business-focussed agencies to fulfill even “out of the box” customer expectations that are linked to the region. Customized policies with detailed local research and analysis will offer the best coverage and protection resulting in high experience and satisfaction.
Market Edge
Insurance agencies are leaving no stone unturned to expand their customer base and gain an edge in the market. Local knowledge can enable an insurance firm to differentiate itself from its competitors. You can relate better to the challenges of your customers. This will allow you to create better policies and serve your customers better. For instance, in addition to providing insurance for our customers, we also own commercial and apartment buildings. We’ve renovated properties and we know exactly what rules and regulations apply in New York and New Jersey and understand what can go wrong. We know first-hand the many complications that can arise in case of damage, and what protection you need to stave off disaster. We believe this helps us be a better insurance agency too.
Better Quality of Service
Insurance agencies need to continually make an effort to improve their quality of service. Local knowledge can also play an important role in the ability of an agency to achieve a better quality of service. It helps you prepare for local issues and challenges and prepare yourself to deliver options that align with local solutions. Not everything has a nationally applicable solution template.
Final Thoughts
Many insurance companies offer insurance and do not care about walking the extra mile to provide the best solutions to the clients. Such companies can continue to run their business with moderate returns and a customer base. However, to gain a competitive advantage and make an exceptional name in the market, insurance agencies need to explore areas beyond policy templates. They need to analyze and consider various elements and factors associated with running small businesses to offer their customers excellent policy options.
Local knowledge is absolutely critical to make the difference in how small business-focussed insurance agencies serve their customers with comprehensive and customized insurance policies. They will be able to provide a better customer experience, improved quality of service, and gain an edge in the market.