P&C

Spotlight on Small Commercial

Small business is said to be over a 40 billion dollar market, and still remains underinsured, suggesting a wealth of untapped opportunities for brokers and insurers.
By Rob Boyce Posted on October 3, 2018

According to Scott Ham of McKinsey & Company, small business is said to be over a 40 billion dollar market, and still remains underinsured, suggesting a wealth of untapped opportunities for brokers and insurers.

Ilya Bodner, founder and CEO of Bold Penguin, said that his firm was taking a more broker-focused approach by providing an online marketplace so brokers can spend time on what really matters: serving as the trusted advisor to their client. On the other hand…

…James Hobson of Attune, Guy Goldstein of Next Insurance, and Ted Devine of Insureon said their efforts focused on going direct-to-consumer and disintermediating the small business segment. Goldstein in particular had a particularly “disruptive” outlook: he believed agents, especially in the small business space, are the most ripe for disruption and may not even exist in the next 5 to 10 years.

However, one thing they could agree on was that in the end, the most important thing in small commercial is smoothing out the customer experience and removing the friction in distribution. And with the exception of Goldstein, all panelists believed that brokers are here to stay, even if the “agent of the future” will take a different form. Bodner even pushed back on the idea that agents may become obsolete in the future, declaring that though the agent of the future might work through different models or under a different definition, agents will always play a role as the trusted advisor, and there will always be areas of insurance “that are too complex to fit on a 4 inch screen,” especially as you move upstream.

The key question—and there is no clear answer—was whether these new and innovative solutions in the small business segment will be able to move upstream to underwrite, price and sell larger risks. Ham’s view was that the winner in this space will ultimately be the incumbents as they move from learning from innovative models, to building their own and partnering with innovative solutions.

More in P&C

Ripple Effects of Cyber Attacks
P&C Ripple Effects of Cyber Attacks
Companies are facing business interruption, higher premiums, and new legislation...
P&C Trillion-Dollar Trend or a Monetary Moment?
Decentralized, digital and disruptive, cryptocurrency takes its place on the wor...
Building the Business Framework
P&C Building the Business Framework
Climate change to play critical role in SEC’s policy and compliance agenda goi...
The Business of Climate Change
P&C The Business of Climate Change
Brokers have an opportunity now to get ahead of environmentally mandated transit...
Excess Exported
P&C Excess Exported
Legal frameworks that allow U.S.-style class-action suits ar...
Patching Up the Oil Patch
P&C Patching Up the Oil Patch
Pressure mounts to mitigate harmful greenhouse gas emissions...