March 8, 2019 by Jason Contant
Brokers looking to sell commercial coverage to small businesses need to keep it simple, fast and client-specific, industry professionals told Canadian Underwriter Thursday.
Sometimes when buzzwords like artificial intelligence, blockchain and chatbots dominate the conversation, the cart comes before the horse when it comes to selling commercial insurance.
“Sometimes people start with a solution and then they try and figure out what the problem is,” said Danish Yusuf, CEO and co-founder of Zensurance, an online brokerage that exclusively offers small business insurance.
This is not a problem exclusive to insurance, but could be said about any industry trying to leverage technology.
“What we do, and what I would suggest in general, is identify what the problem is you are trying to solve for,” Yusuf said. “If you are in a remote village, there’s no point to try and sell technology, E&O and cyber coverage to tech start-ups if they don’t exist in your area.”
Taking a more consultative approach with small business customers than other commercial customers was considered a best practice (8-10 out 10) by 70% of brokers who answered the following question in Canadian Underwriter’s 2018 National Broker Survey: “over the past 24 months, how beneficial has each of these additional practices been for serving your small business customers.” Other choices included finding lower-priced coverage options, operating outside of regular business hours and acquiring an understanding of the customer’s growth plans.
Keeping it simple is another recommendation. “Offer a broad product that generally addresses all the needs of a small business so the buyer does not have to worry that they are buying a sub-standard policy that may exclude some basic coverages,” suggested Sue Duggan, director of product development and small business underwriting at Northbridge Insurance.
Speed is also of the essence for small businesses. “The vast majority of small business owners do not have time to shop around for their insurance, so you have to be able to quote your product quickly and by using all available avenues,” Duggan said. “Using technology to speed up the sales and claims process is become more and more critical for insurers.”
Utilize the power of data analytics and keep ahead of the trends, such as cyber coverage, Duggan added.
Before Zensurance was launched in 2016, the company had few hypotheses they wanted to test around small business coverage. For example, the brokerage thought customers would largely be Millenials, concentrated in big metropolitan cities and looking for hard-to-place risks. However, that’s not been the case – the vast majority of Zensurance’s customers are over the age of 35; from places like Truro, N.S., Brandon, Man. and Red Deer, Alta; and from “main street-type businesses that are looking for a fast, simple way to buy insurance.
“So, one guidance for brokers is not to fall into those stereotypes,” Yusuf said.
He also identified some challenges selling commercial insurance to small businesses:
What types of coverage are clients asking for? The Top 4 according to Duggan are:
Yusuf finds commercial general liability (CGL) is the base for almost any business. “If insurance was Thanksgiving, CGL would be the turkey. You can’t have Thanksgiving without the turkey.”