In an increasingly competitive and homogenized industry, one of the best ways you can expand your book and differentiate yourself is by entering a specialty market. Lumber, trucking, marine or other specialty markets offer independent agents the opportunity to diversify their revenue streams and develop competitive expertise.

When entering a new specialty market, independent agents should build expertise in the industry to distinguish themselves from established competitors in the space. Taking the time to learn the nuances of their specialty industry will help them build a reputation as a true industry expert and client advocate.

Here are three steps independent agents can follow to get started:

1) Find a new market. Take a broader view of your current book and segment your current policyholders to see where they are grouped. They may have already developed a specialty niche. Then, learn what your clients in that space are doing and study their exposures and unique needs.

Beyond current clients, take a deep dive into popular industries operating within your geographical region. Then, consider economic data, national, regional and local trends, as well as specific industry trends, to identify which specialty markets are underserved and could be most advantageous to break into. Equipped with this data, you should be able to come to a clear conclusion.

2) Build a plan. Once you've decided where you want to expand, developing a plan is essential. The plan should include:

• Marketing: Formulate a well-defined and researched marketing plan with resources to conduct regular outreach within the industry.
• Training: Research common training and educational opportunities in this new market segment and use these classes as an opportunity to build an understanding of the market.
• Subject matter experts: Build a list of recognized subject matter experts in the segment and study their insights on trends and issues.
• Potential carriers: Make sure you have the right insurance carriers to support expanding your relationships with the new industry segment.

Working with a carrier that has an open-brokerage model can be valuable to agents looking to move into a new niche. Other carriers require appointments and may have premium requirements or other commitments.

3) Build a reputation. Establishing yourself as a power player in a new niche takes time, but there are plenty of resources to build knowledge and expertise. For example, if you are considering making the lumber segment your niche, consider requesting loss control guides from your carriers or accessing resources produced by the Institute for Business and Home Safety and the National Fire Protection Association. 

Referrals and references are important to expand your reputation and, subsequently, client base. Don't be afraid to ask for referrals and request introductory meetings from your clients. Odds are your current clients and contacts will be glad to give you references to others and support your efforts. 

Attending industry events and joining associations and networks are also great ways to meet key players and industry leaders and make yourself known. However, attend these meetings prepared with insights, including specific risk management or insurance-related knowledge, relevant to these groups. Attendees will quickly see the value of your expertise.

It can take years of commitment and dedication to build a strong reputation and knowledge base in a niche. However, taking the time to research, understand the business and build out a plan can be incredibly rewarding for independent agents looking to diversify and build healthy revenue streams for the future.

Steve Firko is senior vice president of business development, loss control & customer service for Pennsylvania Lumbermens Mutual.