June 2, 2018 by Mazdak Moini, Vice President, Commercial Lines, Aviva Canada
It’s difficult for an industry built on legacy to transition into a world that is rapidly becoming digitized. A new generation of business owners will judge the value of the broker’s advice and the insurer’s promise.
Small and medium sized businesses (SMEs) make up 99.7% of employer businesses in the Canadian economy. Those 1.16 million SMEs account for 30 per cent of Canada’s GDP, 25 per cent of exports and 95 per cent of net job creation. The needs of a medium sized enterprise are as vast as the industries in which they operate. As businesses grow and their needs expand, the value that insurers and brokers bring to the insurance purchase must develop alongside.
It led us to one simple conclusion as we developed a new commercial insurance product for brokers and prepared to launch it into the market earlier this year: if businesses operate and grow differently, their insurance product should be nimble enough to reflect those changing needs. Brokers and insurers who work together with this understanding will certainly win in the mid-market space, and in commercial insurance overall. This simple yet central observation got me thinking about what other lessons I’ve learned from business owners and how they may be applied to the SME market.
The only constant for SME businesses is change. The development of SMEs is not always linear. As businesses grow, they see changes in operations, geographic boundaries, cyber presence, and sometimes even expand to different segments. Good business owners know what their customers need before they need it.
Insurers and brokers looking to fit clients into their own pre-existing segments will increasingly struggle to serve clients effectively. From a technology perspective, insurers that offer brokers with tools and systems that allow speed and flexibility will win more often. To best serve business owners, insurers and brokers must be able to arrange appropriate coverage immediately, and then keep in touch with clients to respond to their needs right away.
Read the full article in the Digital Edition of the June 2018 Canadian Underwriter.
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Mazdak Moini, Vice President, Commercial Lines, Aviva Canada