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Right about now, many small commercial carriers are starting to put together their plans for next year. They might be tempted to phone it in a little—it is summer, after all, and the beach is calling many of us.
But putting together a great plan can position your business for tremendous growth next year—and it doesn’t have to be a vacation-killer. Get started with these seven investment ideas.
- Direct channel
2019 has been notable for the number of new direct-to-customer players entering the market for small commercial. And we are only halfway through the year. These are carriers that have gone direct-to-customer themselves or have gone through one of the various e-broker channels. It seems clear that carriers are starting to figure out the direct-to-customer space, and if you haven’t looked at it closely, now may be the time to carefully assess or to make your move.
- Intelligent data hub
One of the most important investments you can make in 2020 is building out an intelligent data hub. We know that today, many key data elements can be wrong 15-20 percent of the time through human error, laziness, or malice. The market, driven by fintechs, has proven that pulling data from broad sources—public, paid, and internal—and using it to intelligently validate and improve key risk and evaluation elements can have significant results. We have seen carriers dramatically reduce the number of underwriting questions, and cut quote times for agents and customers from 20 minutes to five minutes. Others have used these data elements for improved risk selection and pricing, and are showing significantly improved loss ratios compared to peers. The old point-to-point data feeds from a few long-established vendors is becoming uncompetitive.
- Enhanced digital marketing
Another element of note for 2019 is that we have seen a rise in digital marketing by small business carriers. This includes everything from content development to banner ads to paid search. While the battle and content are nowhere near the level of personal auto today, and may never reach that full frenzy, they are definitely ramping up. At a minimum, you should ensure that your customers are seeing sufficient digital content about your small business expertise when Googled directly. Even better is to have a plan to help draw key customer segments to you through planned digital marketing.
- New platform
A new platform is a big step, and one that should not be taken lightly. That said, if your old system can’t keep up with the pricing and product enhancements you need, or with the new digital and mobile services you need to provide, it’s a step you should consider taking. In the last three years, we have seen a significant uptick in the number of carriers that have done core small business platform engagements. Done well, these investments give them speed and agility advantages and often enable the launch of new channels, products, and services. Is your platform still able to keep up with your needs?
Self-service done right is a win for you and for your customers. The key is that it must be done in a way that makes it easy for customers to use, builds trust in the process, and is delivered and promoted in a way that customers know about it. Few carriers today have been successful at all three of these steps. Those who have managed it enjoy reduced expenses, improved customer satisfaction, and enhanced retention.
Onboarding is often one of the most overlooked steps in the sales process, yet this is the first real impression the small business has of you as a carrier. Done very well in a way that educates the customer, connects them to provided services, and gathers and provides the necessary information for their policy, it can be an engaging experience that can improve retention by a significant number of points. Done poorly—and many experiences today are poor—you encourage your customer to wonder whether they made the right choice in selecting you.
Fintech investment has now been strong for a number of years and has given rise to mature players across many areas of the small business spectrum. It is time to seriously consider a few of these start-ups and to make the investment. Your aim should be not just to select a partner or two, but to make real investments in time, resources, and capabilities to wring the most benefit possible out of the relationship for both of you. The winners will be those that are willing to adapt themselves to take advantage of partners to improve results and experiences for their customers and themselves. Are you ready for a new relationship in 2020?
Regardless of which of these seven ideas you choose to adopt, make 2020 a year to significantly improve your business. To start the conversation on the best step forward for your organization, just reach out to me here.