Every summer, insurance companies begin to plan their major initiatives and investments for the coming year. But 2020 is, to put it mildly, a little different than the average. The uncertainty is not just due to the pandemic. Economic change and volatile legislation are also important.
They all make this year's planning process more difficult – and more important. To help insurance executives navigate this storm, this blog series will introduce some non-remorse measures
that various insurance companies can include in their 2021 plans. Let's start with small commercials.
Growth will return to small commercial markets eventually
However, we know a few things about the market in 2021:
- Customers will be more focused on premium prices given the state of the economy.
- Customers will be even more
- If their insurance did not cover pandemic business interruptions, customers will be more careful with carriers and want a deeper understanding of what is and what is not covered.  With these market conditions in mind, here are five things that small commercial insurance companies should consider for investments to improve their capacity to grow 2021:
- Become a digital attacker
More sales searches for new insurance and renewals will begin online. To succeed, operators will need a strategy to attack opportunities in the digital marketplace.
This does not mean that all small commercial operators must have an offer directly to the consumer. This means that being able to reach your customers via digital channels will go from nice to have to need-to-have .
Potential strategies may include:
- Attracting customers to your site and then directing them to agents with better experience, tools and training materials so that you are a source of expertise.
- Digital partnerships that engage customers when needed or work through eBrokers such as Insureon.
- Direct to consumer offers such as on Hiscox, TRE or Neste.
- Put intelligent data to work
During the recent crisis, we learned how quickly small commercial companies must develop and flex to meet changing demands. Restaurants suddenly acted more like grocery stores selling food for delivery or pickup.
In this environment, the 15- to 20% inaccuracy of classification elements that most carriers live with is unsustainable. As competition intensifies, carriers with better data will be the ones to achieve better insurance results and win in the long run. It's time to move past specific data methods and invest in modern data platforms that can capture, clear and prepare data from multiple sources to improve the accuracy of ratings, citations and underwriting results.
- Improving and Consolidating Core Platforms  The need for 2021 will be no different than it has been for the past five years: if your core policy does not allow you to easily make policy changes and does not allow you distribution flexibility to quote through portals, application programming interfaces (APIs) and immediately, it may be time to start upgrading.
- Increase bookkeeping with intelligent innovations
Small businesses have had to adapt dramatically to do so through this crisis. Is your company sure what is in your books?
Most carriers go years without looking more closely at the renewal of the business unless there is a major claim. It is a huge risk with today's pace of change.
Investing in intelligent data mentioned above does not have to be just about new business. If carriers do not want to see the erosion of underwriting, they need to redefine their renewal process to ensure that what they renew and price for matches becomes a reality.
- Seek hyper-growth opportunities through converging gigs
Today, more information and services for small commercials come from digital service providers such as hosting services, payroll and accounting solutions, and employee benefit providers. This creates new opportunities to integrate with these suppliers and offer unique distribution or service opportunities to your customers.
In 2021, it will be worthwhile to have a small amount of investment focused on exploring one or two asymmetric growth opportunities by striving for an innovative game with another player in the small commercial market.
The year ahead is no time for a business-as-usual mindset. Pause, think about what the future is likely to bring and consider what will really move the needle for your business. Hopefully, these five ideas will give you a place to start.
And if you want to know more about any of them I would love to hear from you. In our next post, we look at investment ideas for commercial transport companies and specialty companies.
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