5 highly effective concepts to spice up small industrial insurance coverage in 2021
Every summer, insurance carriers start planning their key initiatives and investments for the coming year. But 2020 is a little different than the average year to say the least. The uncertainty isn’t just due to the pandemic. Economic changes and a volatile regulatory environment are also cause for concern.
They all make this year’s planning process more difficult – and more important. To help insurance managers cope with this storm, this blog series introduces some measures that you will not regret
Various insurance companies can include in their 2021 plans. Let’s start with a small commercial.
The growth will eventually return to the small commercial market
In 2021, the small commercial market will continue to be very volatile. We can assume that airlines will cope with the impact of the drop in premiums from lost small businesses that went down in the 2020 crisis. It is unclear how quickly small business growth will recover. We know it will come back; it’s just a matter of when.
However, we do know a few things about the market in 2021:
- In view of the economic situation, customers will concentrate more on the premium price.
- Customers will search for insurance online even more often.
- When their insurance does not cover the pandemic business interruption, customers are more cautious about shippers and want a deeper understanding of what is and is not covered.
With these market conditions in mind, here are five things to keep in mind that small commercial insurance carriers should consider investing in to improve their growth opportunities in 2021:
- Become a digital attacker
More sales searches for new insurance and renewals will begin online. To be successful, carriers need a strategy to attack opportunities in the digital market.
This does not mean that every small commercial carrier has to have a direct-to-consumer offering. However, it does mean that the ability to reach your customers through digital channels is no longer all good need to have.
Possible strategies can be:
- Attract customers to your website and then route them to agents with better experiences, tools, and training materials so that you are a source of expertise.
- Digital partnerships that involve customers at the point of need or via eBrokers such as Insureon.
- Direct-to-consumer offers such as Hiscox, THREE or Next.
- Use intelligent data
In the recent crisis, we learned how quickly small retail companies need to develop and be flexible to meet changing requirements. Restaurants suddenly began to act more like grocery stores selling groceries for delivery or collection.
In this environment, the 15-20 percent inaccuracy of the rating elements that most airlines live with is unsustainable. As the competition gets tougher, carriers with better data will have better underwriting results and will win over the long term. It is time to break down piecemeal approaches to data and invest in modern data platforms that can collect, cleanse, and prepare data from multiple sources to improve the accuracy of valuation, bid, and drawing results.
- Improve and consolidate core platforms
The need in 2021 will be no different from the last five years: If your core policy platform doesn’t allow you to easily make changes to policy forms, and you don’t have flexibility in distributing them through portals and application programming interfaces (APIs) and directly, it may be time to start upgrading.
- Increase book management through intelligent innovations
Small businesses had to adapt dramatically to survive this crisis. Is your company sure what is actually on your books?
Most airlines go for years without scrutinizing business renewal unless there is a serious claim. This is a huge risk at today’s pace of change.
Investing in the smart data mentioned above doesn’t have to be all about new business. If carriers don’t want to see underwriting erosion, they need to redefine their renewal process to ensure that what they are renewing and prices match for reality.
- Look for opportunities for hypergrowth through converged games
Today, more information and services for small commercials are coming from digital service providers such as hosting sites, payroll solutions and employee benefits providers. This creates new opportunities for integration with these providers and offers your customers unique sales or service opportunities.
In 2021, it will be worth making at least a small investment to explore an asymmetrical growth opportunity or two by pursuing an innovative game with another player in the small commercial market.
The coming year is not a time for normal thinking. Take a break, think about what the future is likely to bring, and think about what will really move the needle for your business. Hopefully these five ideas will give you a starting point.
And if you want to know more about any of them I would love to hear from you. In our next post we will look at investment ideas for trading and specialty providers.
Subscribe to more from Accenture Insurance