Small Commercial Insurance: Bigger, More Varied and More Specialized
Changes Driven by New Technology and Increased Carrier Appetite
While most insurance agents and carriers are well aware of the opportunity for growth in the small commercial market, not everyone is focused on the rapidly developing trends that have the power to accelerate that growth: small commercial is getting bigger, more varied and more specialized, all at the same time, according to Semsee’s 2020 Trends Analysis. These trends—driven in large part by advances in technology, carrier appetite, and the changing demographics of the small business market—are creating the perfect storm for agents looking to grow their commercial lines books, according to Semsee, the automated small commercial quoting solution for agents.
“Many small businesses today are run by Millennials and GenXers who expect a digital experience, and that includes speed, efficiency and transparency. This affects both the insurance products themselves, and how they are delivered and serviced,” said Philip Charles-Pierre, CEO of Semsee. “The good news is that advances in technology combined with workflow efficiencies, and better data and analytics are creating even more opportunity for agents and carriers to serve this dynamic market, bring new customers on board and service them at lower costs.”
Semsee analyzed behavior from its platform on quoting small commercial policies to develop the following trends that will continue to impact the small commercial market in 2020.
1. Quicker, more accurate quoting expands the definition of small commercial. Most in the industry considered small commercial to be limited to premiums of $25,000 or less when Semsee first started in 2017. That top line is rising, and the total range is expanding thanks in part to the power of technology and data analytics, which make the quoting process more efficient. Expect the definition of small commercial to continue to expand in 2020. At Semsee, for example, premiums on new commercial business quoted ranged from $500 to $60,000 per year in the fourth quarter. Ultimately, as the speed to quote is significantly reduced, these efficiencies will enable agents to be even more consultative with their clients to choose the right policies. In the end, small commercial will be less about premium size and more about the ability for an agent to automatically get a quote from a carrier without much interaction with an underwriter.
2. Automation, appetite access, and smart forms improve agency value. Commercial lines quoting has traditionally had a bad reputation. Originally viewed as complex and time-consuming, both offline and online, old processes limited the number of carriers an agent might work with to get the best value for their clients. That’s changing. Through advancements that digitally expose carrier risk appetites, utilize smart forms, and automate the user experience, solutions for quoting and processing give agents the ability to produce multiple carrier quotes. In Q4, agents on Semsee’s platform quoted an average of 3.2 carriers, an important number that highlights how they are looking for ways to best serve their clients’ needs and deliver the greatest value to protect their businesses.
3. Segmented data increases the opportunity to serve specialized industries. We expect to see more specialization as insurers and MGAs create niche products and programs. Driven by better data, the ability to service target segments more effectively is a significant opportunity for agents and carriers. At Semsee, agents quoted a wide variety of businesses in Q4. The businesses were as varied as a store that sells balloons and balloon accessories, music school for children, members-only hair salon, music festival, cabinet cutting machinery manufacturer, and power washing contractor. This growing trend will continue to put pressure on agents to either specialize or work with tools that will help them serve broad groups of customers. By doing so, agents can start to tailor marketing efforts by business classes and offer unique perspectives to those customer segments.
About Semsee:
Semsee simplifies and accelerates the small commercial quoting experience for independent agents, giving them more time to service their clients and grow revenue. Inspired by the promise of the original SEMCI initiative, Semsee combines advances in technology, workflow efficiencies and data and analytics to give agents fast, accurate quotes from multiple appointed carriers through a single-form submission. Semsee is backed by the D.E. Shaw group, a global investment and technology development firm. For more information visit: https://semsee.com.
