Small firms want ‘increasingly rapid responses to commercial insurance questions’

Insurance buyers in small and mid-sized businesses are “comfortable” doing online research, but insurance carriers “rarely” offer online quoting for small businesses, Conning Inc. suggested in a report.

In the report, titled The Small Business Sector for Property-Casualty Insurance: Market Shift Coming, Conning noted that some insurers and distributors are ‘observing profound changes’ in the small business market. Those changes include technology, insurers’ investment in infrastructure and changes in buying behaviour.

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“Small businesses owners’ behaviors are evolving similar to personal lines,” Conning stated in the executive summary of the report. “SBM customers are shopping insurance more, are more comfortable doing their own online insurance research, and are more price-sensitive. The impact on insurers is that the customers are expecting, and therefore demanding, increasingly rapid responses to commercial insurance questions and premium quotes.”

Conning’s small business sector report is based in part on interviews with executives in insurers, data from the United States Census Bureau and Bureau of Labor Statistics, financial statements from insurers and a review of small business portals.

An analysis, of websites of insurers offering coverage for small businesses,  “does not reveal consistent differences in communication and services attributable by insurer profile or primary distribution channel,” Conning noted.

“Most insurers offer online product information and online agent locator, bill paying, and claims reporting services. Online quoting, small business informational portals, and special services for small businesses are rarely offered. It appears that the lack of these indicate opportunities to develop more robust direct digital communication between small businesses and insurers, depending on the demand, technical capabilities, and potential channel conflict concerns.”

Conning, which provides investment management and insurance research, estimates the small business property and casualty market had about US$91 billion in direct written premiums in 2013.

“This is a little more than 30% of the commercial total,” Conning stated. “The premium potential drops substantially to $58 billion when excluding high-hazard, farm, and other specialty exposures, such as professional liability; we define the Principal SBM as this $58 billion premium potential.”