Lesson 4: If you can’t build it…

As I mentioned in my previous posts, price, customer focus and customer service are three lessons small commercial insurers can learn about selling policies online from the experiences of personal lines carriers. But what can they do if their company can’t manage the transition to selling and servicing small business customers effectively through online channels?

We have seen a couple of different responses from carriers. The first is simply to buy the capability:

  • Allstate purchased Esurance to give it a better direct capability.
  • Famers purchased 21st Century.

Other carriers have decided not to pursue the direct market. Chubb, for example, has maintained a clear focus on high-net-worth individuals. It offers policies and services geared toward this market and has determined that its customers prefer to purchase policies through agents rather than through direct channels. For this reason, to date, it has stayed out of the online market.

The key here is that insurers need to have a direct strategy for small commercial lines that recognizes a segment of the market will be moving to direct channels. Insurers can choose to be part of it or not….but they can no longer ignore it.

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