No two businesses are the same, and neither are the risks they face. Finding a niche focus allows brokers to situate themselves as the go-to for businesses in that industry. For instance, crop insurance is a great niche insurance market that also has a big target audience to work with.
Not all industries face the same risks
All businesses face risk like criminal damage or accidental fire, and need insurance policies that protect them from these perils. However, organisations also face unique risks according to the industry in which they operate, as well as the products or services they offer.
Farmers need insurance policies that are tailored to the type of business they operate.
To use a comparison, while city shop owners may need an insurance policy that covers accidental harm to the customer, it's unlikely the average Australian farm welcomes its clients onto site on a daily basis. Instead, farmers need insurance that protects their crops from risks such as adverse weather conditions.
However, even within the industry, requirements vary and farmers need insurance policies that are tailored to the type of business they operate. Climate-related risks are very different for farmers operating in the tropical north of Queensland compared to those in Tasmania, for example. The type of crop a farmer grows also opens them up to different hazards, with broadacre products at risk of damage from loose live stock, and greenhouses reliant on a fully functioning heating or cooling system.
From an insurer's perspective, different crop types equal variable levels of loss, and so attract different premiums. Some crops produce more yield than others per growing season, while each has a different economic value which changes according to wider global conditions.
Why focus on a niche insurance market from a business perspective?
No matter the product or service, dealing with someone who knows about the exact product you want is preferable to a person who knows about the sector in general. If you know you want a Toyota vehicle you'll pick the specialist garage as opposed to the general car salesman down the road, because they'll give you the information you really want.
As a business, a niche area of focus allows you to establish your name and brand as the industry leader, becoming the go-to broker. Your marketing efforts are targeted to a set client base, so you can speak to your ideal customer much more effectively and really catch their eye.
A niche area of focus allows you to establish your name and brand as the industry leader.
With a reputation for excellence, you might be offered opportunities to support industry events as a familiar name within the industry, raising your profile further. You also stand a much better chance of impressing your customers and building trust by being able to hold informative conversations that demonstrate thorough understanding of the challenges they face.
In terms of improving your workflow, specialised knowledge and a niche focus make you more time efficient because you know the industry inside out. You can answer questions and make decisions quickly, without first having to get up to speed on the sector. Analysing risk properly is much easier when you know the sector, as is developing the right kind of policy for individual clients. Meanwhile, when an issue does arise, you have contacts on hand to resolve the situation quickly and prevent it from escalating into a large-scale claim.
Considering crop insurance as your broker niche
A good insurance niche has a big enough audience and level of risk to provide sufficient income, but without too many brokers competing for the same business. Crop insurance brokers operate in just that kind of market.
There are around 85,000 farm businesses in Australia.
There are around 85,000 farm businesses in Australia, according to the Australian Bureau of Statistics, and the crop industry alone is valued at $30 billion by ABARES. Meanwhile, the farming industry as a whole faces significant and ever-changing risks that can't always be prevented ahead of time. The right crop insurance policy gives farmers the freedom to invest their revenue and grow their business without concerns about how they'll manage if their crop doesn't yield as much as they'd planned.
Primacy's crop insurance policies protect against:
- Adverse weather – Drought, flooding, hail or storms can cause significant damage to almost any crop. While farmers manage expected risks on site, mother nature is unpredictable and sometimes no amount of pre-planning can adequately protect a crop.
- Criminal or malicious damage – Australia's farms are vast and cannot be patrolled 24/7. Unfortunately, farmers are sometimes subject to malicious damage to crops, machinery, equipment and facilities. They may also be at risk from practices on neighbouring farms, such as damage caused by unsecured livestock or chemical overspray that's dangerous for the type of crops they grow.
- Pest and disease – A single pest or disease can wipe out an entire crop, and reduce a farmer's profits to zero in the blink of an eye. As with adverse weather, these types of issues are not possible to predict, and cannot always be managed ahead of time. Some crops are particularly susceptible to certain pests, such as vines, and our policies ensure farmers are protected from the most relevant of risks.
- Economic markets – Whatever's happening in Australia, the rest of the world plays a large role in determining the success of our local farmers. A good or bad crop elsewhere can significantly influence the prices a farmer fetches for the crop they sell.
- Specialist crop protection – Our crop insurance policies are tailored according to individual products and ensure protection according to the risks each type of farmer faces. Forestry insurance naturally includes lightning and windstorms as potential risks, while greenhouse policies protect against building structures necessary to the successful growth.
Being a Primacy broker
Australian farmers work hard, but face new challenges everyday. When it comes to insurance advice, they need someone who understands their world and has the specialist knowledge and policies to help their farms succeed.
At Primacy, we tailor our products to truly serve the needs of Australia's farmers, and ensure our brokers have the best possible policies to offer. Learn more about specialising in crop insurance by visiting our broker information page.