Online insurance marketplaces are now actively pursuing small business customers. According to IDC, the historically underserved small business customer is turning to the Internet to locate coverage, and insurance marketplaces are making the process easy by allowing insurance shoppers to search for optimal coverage among several carriers at one web location.
Results from IDC’s 2001 Online Insurance Small Business Survey suggest 7 percent of small businesses with Internet access have already used the web to shop for insurance. The survey also indicates that businesses with fewer than 50 employees have a greater propensity to utilize the Internet for insurance needs than their counterparts with 50 to 100 employees.
“Businesses with fewer than 50 employees are less likely to be served by insurance agents,” said Karen O’Brien, research manager for IDC’s eInsurance advisory service. “Online insurance marketplaces facilitate the process of matching small businesses to carriers, increasing the appeal of the small business market to insurance carriers.”
Partnering with online insurance marketplaces can be an attractive and cost-effective option for insurance carriers to reach the small business customer segment. Marketplaces that offer insurance products from multiple carriers are a positive development in the small business market, as individual carriers typically do not offer coverage in all states for all types of insurance coverage. Marketplaces facilitate access to small businesses through a carrier’s agents, nontraditional insurance distributors such as banks and industry associations, and Internet portals.
IDC’s new report, “Small Business: The New Darling of eInsurance Marketplaces” (IDC #B25186) discusses the evolution of small business as a target market for insurance carriers and financial institutions. The report looks at the roles insurance marketplaces are playing in the development of the small business insurance market and the challenges those marketplaces face.
The study concludes by categorizing marketplaces serving the small business market by their offerings and their distribution models and profiles selected insurance marketplaces.