Other parts of this series:
Carriers looking to win big in the small commercial insurance sector will need to “pivot to the new” after improving the core of underwriting. Design, speed and partners all play a crucial role in driving growth from new opportunities.
In the last two posts of this series, I explained the challenges ahead for carriers in small commercial and how improving the underwriting core could go a long way in fending off price and margin pressures from new entrants to the market.
But there is also an opportunity for significant profitable growth that comes with “pivoting to the new.” This second key strategy will enable carriers to leverage new channels, markets and alliances for a bigger promise in a small world.
Here at Accenture, we see three major trends about to shape the future of small commercial insurance: the new small-business owners (which I described in detail in Part One of this series), intelligent advisory (covered in Part Two) and digital first.
“Digital first” refers to the rapidly evolving expectations of customers who have become accustomed to digital in every other aspect of their lives. They seek a compelling experience at every step of their purchasing journey. Their digital interaction as a consumer must be clear and simple; easy to get; personal and adaptive, and hyper-connected.
In response, many industries have moved in the last two decades toward offering end-to-end digital experiences. The travel industry paved the way in 1995, followed by advertising in the early 2000s, stock trading in 2005, real estate in 2010 and payments in 2015. These businesses have all created single, unified experiences.
There is an opportunity in small commercial insurance to offer a similar, simple, end-to-end digital experience for small-business owners who prefer to do everything themselves. They could offer this in parallel to the agent model.
The “pivoting to the new” strategy has three key components: 1. Design, 2. Speed, 3. Partners.
Design to Win: Carriers in small commercial need to understand that while channels and markets bring in new opportunities, it’s the experience design that wins customers over. Insurers will have to define their digital objective, discover, hypothesize, experiment and launch. As an example, read about our experiential research with small business owners on their commercial insurance buying experience.
Speed: Moving to the new means operating in the new. Carriers wanting to succeed and thrive in a new digital environment will have to experiment quickly, develop, deploy and scale. Assess and qualify the ideas that matter to your business. Build and experiment with ideas to prove customer need. Develop ideas into “most valued players” and confirm customer value. Finally, industrialize and scale the ideas.
Partners: When looking at the greater digital ecosystem, carriers will have to pursue an open-ended approach for the right partnerships. Rather than having a pre-conceived notion of what the partnership should accomplish, adopt an open mind and keep at it. The fastest-growing area of insurance is the one where carriers are depending on the right alliances.
The pressures on small commercial are only going to continue. These strategic paths with tactical solutions can help you not only to survive the challenges, but also to drive significant benefits and thrive in an increasingly digital future.
You can contact me should you have any comments, questions and feedback.