Differentiating yourself as an independent agent is important if you want to stand out among your competition. One way to do this is to identify a few niche products that can supplement your healthy portfolio of general insurance coverage and drive significant growth in your revenue stream.
If you’re looking to branch out and specialize, consider developing a specialty in any of these three emerging markets.
Cannabis
A recent study by New Frontier featured in a June, 2021 article in Forbes found the U.S. market for selling cannabis legally is expected to reach $43 billion by 2025. Thirty-six states have authorized marijuana for medical use. Seventeen, plus the District of Columbia, have legalized certain amounts for adult recreational use as of April, 2021, according to Pew Research.
In October, Insurance Journal interviewed industry experts with insights on the latest trends in the cannabis space. Takeaways included: the vast majority of premiums are being written in the E&S space, and capacity, already deemed tight by these experts, will only get tighter as the market continues to harden.
Food Trucks
Industry research firm IBISWorld in July, 2021 reported there are more than 32,000 food trucks in the U.S., and this business segment has grown by about 12 percent each year since 2016. Due to the Food Truck industry’s relatively low start-up costs, this segment is expected to continue growing at a rate faster than several other industries. Growth is coming from multiple areas, including restaurants looking to grow, food workers-turned-entrepreneurs, and immigrants and women — two populations that have traditionally been disadvantaged in the area of small business loan opportunities.
Finally, MobileCuisine.com notes millennials — now the largest segment of the U.S. population — are largely driving the food truck demand. And as the trend grows, the need for specific insurance products, and guidance around varied liability and certificate needs, will continue to grow in tandem with the industry.
Adult Beverages
The craft beer market is projected to grow, on average, by 13 percent per year between 2020 and 2024 according to Technavio, a global technology and research advisory. Again, the rising population of millennials, more than 72 million strong in the U.S., is cited by the company as a driving factor of the industry’s growth. From an insurance perspective, liquor liability can be a huge cost center for craft brewers who aren’t adequately protected or don’t understand their exposure extends beyond that of a typical, non-alcohol-based business.
Wineries, also popular among millennials, make up a $434.6 billion industry expected to grow by about 4.2 percent annually through 2027, according to ResearchandMarkets.com. The biggest challenge for wineries, however, will likely be securing insurance. Fires, drought, flooding, and wild weather have impacted wineries from Sonoma to the Finger Lakes in recent years, shrinking insurance capacity and raising costs.
Your Niche Opportunity
Each of these industry segments are growing and navigating risk: cannabis through legal and related liability issues, food trucks through various state, local and client insurance certificate requirements, as well as the unique dynamic of insuring a business on wheels, and adult beverages seeking affordable insurance options for a wide range of liability issues. A knowledgeable independent insurance agent can help them meet these challenges.