Small Commercial Insureds: Expectations for New Buyers Quantified in Key Survey

Generational trends point to inherent differences and new business approaches

The market for small business insurance is evolving in many ways. With the number of small businesses on the rise, emerging risks and new products to cover those risks, and even shifting business models due to the pandemic, there are many opportunities for new small commercial sales.

For agents looking to grow their small commercial, younger business owners are a critical segment. This is especially true as they plan three to five years out and the number of new business owners under 40 continues to increase.

This study examines the impact of generational preferences on ‘selling

and servicing’ small commercial.

What our survey found is telling. Next generation business insurance buyers clearly want more from their agents: more service, more options, and more communication.

It’s important for agencies to be prepared.

We’ve designed this report to not only examine the insurance buying and service preferences among Millennials, Gen Z and Baby Boomer business owners, but to provide practical information to advance your ability to attract small business owners of all generations.

The good news: customers are happy, at least right now

It’s clear that participants in our survey value their agents and the insurance buying and services experience they provide. Both Millennials/Gen Zs and Baby Boomers

give high marks to their agents. Overall, 72% of Baby Boomer and 70% of Millennial/Gen Z business owners rate their agents’ ability to understand their businesses and insurance needs as good or excellent.

Most business owners are also pleased with the buying process, with 72% of Baby Boomers and 68% of Millennials/Gen Zs reporting excellent or good experience with getting pricing and coverage options from their agents.

But they want more education about insurance

Insurance is complex. That’s one of the reasons so many small business owners work with agents for their insurance needs. There’s ample room for agents to play more of an advisor/educator role, especially with younger clients.

When it comes to understanding their policies, only 26% of Baby Boomers and 21%

of Millennials/Gen Zs give their own policy acumen the highest marks.

Younger business owners need more information and education. We asked survey respondents if they’d ever been surprised about their insurance claims—both positively and negatively. Overall, 50% of Millennials/Gen Zs say they have been surprised to find something wasn’t covered by their policies that they expected to be. An equal number (50%) have been surprised to find something actually was covered that they did not expect. Only 21% and 18% of Boomers respectively have been similarly surprised.

They want more information about what they’re buying

Our first Small Business Snapshot revealed that small business owners really want more information at the point of sale—before they buy and renew policies. They told us they want to clearly see coverage and pricing options from multiple carriers.

It’s all in the timing—and that means more frequent communications

Millennials/Gen Z business owners say they want more regular communication and interaction with agents about their risks and coverage. They want to engage with agents more frequently and they’re evenly divided about exactly how often.

Nearly one quarter want to talk to agents monthly, 24% want quarterly communications, and 29% want to connect with their agents two times a year. Baby Boomers are different—67% said they’re happy with a one-time-a-year review with their agents.

The rapidly evolving small business market—an opportunity for agents

The pandemic has impacted almost every small business. Some have identified new opportunities, others have shifted their business models, and others are facing big challenges or shutting their doors. Add to that the fact that many newer business owners must early on test different models to find the right mix of products/services and market opportunities. The common theme among all of these scenarios is change.

Our survey found that business change is more pronounced among younger business owners. Overall, 50% of Millennials/Gen Zs report their businesses changing in 2020

in ways that impact their insurance needs. Only 25% of Baby Boomers say the same.

Closing the generation gap in your agency

The survey showed that there are clear differences in the ways business owners

of various generations want to buy insurance and interact with their agents.

Yet, there are many things agents can do to broaden their appeal to include all generations—from Gen Z to Millennials to Gen X and Baby Boomers.

It starts with assessing your agency’s generation readiness.

We’ve developed the following checklist to help you determine where you are.

Checklist to assess your generational readiness

• Does your agency employ a diverse group of producers and CSRs who can relate to and connect with customers and prospects of all generations?
• Do you have policies, procedures and service models that enable staff to meet a wide variety of individual customer needs, such as after-hours support?
• Do you have a good understanding of how often your customers want to hear from you? Are you delivering on that expectation?
• Are you using technology to make the processes for buying coverage,making policy changes, and paying easier and more efficient for your customers?
• Are you using technology to enhance your ability to provide a variety of insurance coverage and pricing options for your customers?
• Does your team regularly make time to educate customers about insurance and risk, especially what’s included and excluded within their commercial policies?
• Are you performing annual reviews, including re-marketing coverage, and presenting options to customers?

Semsee’s Small Business Snapshot was conducted January 8—10, 2021 using SurveyMonkey’s online platform. Results are based on a total national sample of 605 self-identified small business owners of which 54% have insurance and purchase it through an agent. Semsee is a small commercial quoting platform that combines advances in technology, workflow efficiencies, and data and analytics to give agencies fast, accurate quotes from multiple appointed carriers through a single-form submission. It is the fastest—and smartest—path from lead to quote. Agents using Semsee see productivity gains, as reduced administrative time means more opportunity to pursue new business. They also see higher customer retention, as their ability to offer more carrier options, accurate quotes and comparisons means clients see more value. Semsee works with hundreds of agencies and more than 20 carriers for BOP, workers’ compensation and commercial auto.