Five Diversification Strategies for Mutual and Mid-Market Carriers to Capitalize On

As mutual and mid-market carriers prepare for what’s next, strategic planning and diversification play crucial roles in ensuring long-term success in the evolving insurance industry. Looking ahead, embracing adaptability, navigating a highly competitive marketplace, and finding unique differentiators are among the top priorities for carriers. To support mutuals and mid-markets in strengthening their strategic planning and creating growth opportunities in the next 12 months, we share five strategies for diversification that can take businesses to the next level.

In today’s competitive marketplace, mutuals and mid-markets must evolve their products, expand into new markets, and delight customers with critical tools for long-term success. Diversifying your business is an essential strategy to reduce reliance on a single line of business or market segment and mitigate the risks associated with industry fluctuations or unforeseen events. By opening the doors to additional revenue streams, attracting a broader customer base, and leveraging innovation, mutuals, and mid-markets can stay ahead of the competition and meet evolving customer needs. However, knowing where to start to achieve the best outcomes for your business can be challenging.

Here are five strategies mutuals and mid-markets can use to grow their business over the next 12 months:

  1. Broadening Lines of Coverage

Expanding into new insurance lines can be instrumental in tapping into new markets and growth opportunities for businesses. However, this can be a daunting process for many. With the support of a trusted partner, mutuals and mid-markets can meet evolving customer needs and expand into new lines without taking on excessive risk.

Diversifying beyond traditional insurance lines can mitigate risks associated with overreliance on a single line of business, building resilience against market fluctuations and economic downturns. Don’t let unfamiliarity with different insurance products halt your growth. Instead, leverage claims experts to help develop these new lines while enhancing expertise within your team.

  1. Expanding Geographical Reach

Driving growth in new regions is an integral part of securing the future of your business. Breaking into new geographic areas can reduce dependence on a single market, lower the risks of localized economic fluctuations, and allow your business to reach new customer segments and untapped markets. To unlock this growth potential, working with a trusted partner with nationwide or even global reach can help you navigate an actionable plan for expansion. Luminos, our industry-leading RMIS platform, provides industry insights and advanced analytics that can pinpoint growth opportunities and guide you toward data-led strategies for success. Jurisdictional expertise supplied by a partner, such as GB, can assist in determining which new territories could present more exposure than others.

  1. Adopting a Mutual Holding Company Structure

The lesser-known mutual holding company (MHC) structure was a key topic of conversation at the National Association of Mutual Insurance Companies (NAMIC) and is a powerful long-term growth strategy. By establishing an MHC, mutuals can expand their operations, access additional capital, and collaborate with various “paper” businesses to enter new markets and business lines while maintaining a mutual status. This structure provides the flexibility and resources needed to invest in innovative technologies, pursue strategic acquisitions, and enter new markets. However, it also requires endorsement from the applicable department of insurance.

  1. Embracing Technological Innovations

Digital innovations have come a long way in the insurance landscape, making significant improvements for carriers in streamlining operations and enhancing the customer experience. RMIS tools, predictive modeling, and claims management technologies are among the most valuable resources for mutual and mid-market carriers. These tools help to stay aligned with industry insights and gain visibility into operations, top-performing lines, and customer trends. With data insights at your fingertips, growth opportunities are endless. When planning your budget, consider whether you need to absorb all of these costs directly or whether you can benefit from these tools through an expert third-party claims and risk administrator partner, such as GB.

  1. Developing Talent and Skills

Leveraging a trusted partner can be a cost-effective solution for mutual and mid-market carriers looking to overcome talent shortages and diversify their businesses with enhanced resources and skill sets. GB’s dedicated Carrier Practice team becomes an extension of your business, providing access to a pool of highly skilled professionals with expertise in various insurance lines and industry best practices. Mutuals and mid-markets can tap into this enhanced knowledge and expertise without needing extensive internal hiring and training processes, thereby empowering their team’s growth. With a strategic partner, you can confidently navigate the challenges of talent shortages, diversify your business, optimize costs, and ensure a high-quality customer service experience.

If your business is working toward strategic planning and growth for the year ahead, book a free consultation. You can also find me at the NAMIC Annual Conference from September 17–20 where I’ll be available for meetings to explore opportunities for you to achieve your goals in 2024.

Amy Cooper

VP — Carrier Practice Sales

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