Could self-service and digital quoting and binding be gamechangers for independent agents and brokers working in microbusiness lines?
Though they’re the smallest of small businesses, microbusinesses account for the largest portion of small businesses in the United States. They dominate small business insurance books. But they also represent the smallest amount of premium because the average policy premium is so low.
“Pushing close to 75% of all small businesses are below 20 employees,” said Jack Ramsey, vice president of the agency channel at Next Insurance. “And a high percentage of those are below 10 employees. That microbusiness space is the largest volume of customers that any agent has if they do any small business selling.”
When it comes to account handling, he said the premium amount is irrelevant, and that it is just as difficult and cumbersome for traditional carriers to take care of accounts with $1,000 premiums as it is to take care of larger small business accounts that have $30,000 premiums. The same manual processes exist across that spectrum.
“And that’s where talking to agents about a digital-first model for that micro space is a gamechanger,” Ramsey said.
Microbusinesses require frequent proof of insurance in their operations, and agencies have had to make decide: Do they hire dedicated employees at a “massive expense” to do what Ramsey described as “busywork,” or do they leverage expensive carrier service centers instead?
Even if they opt for the latter, Ramsey said traditional carriers have not been able to build the infrastructure for significant self-service capabilities. This is where Ramsey believes organizations like Next can step in and reshape the solution.
“Traditional carriers — and this was the world I came from — don’t have that ability,” Ramsey said. “The legacy systems are so difficult to build and manage. It’s been hard for those carriers to build a true self-service or a true digital quoting and binding experience that matches the micro needs.”
Agents who work with Next receive personalized embedded links that enable customers to quote and bind their own insurance policies on behalf of the agent. This ensures the agent still owns the account. Agents can still be involved in manual servicing work, too, or they can tap the Next service center.
He did acknowledge the need for “a manual, human intervention role in larger” small business accounts. There’s a certain threshold at which public data isn’t as easily accessible and an individual must insert themselves, ask questions and further evaluate underwriter risk, he said.
But for accounts below a certain size and certain threshold, with a company that has access to reliable in-house and third-party data, “you should be able to create a digital experience for a certain box of micro,” Ramsey said. “And make it seamless.”
Ramsey brought more than three decades of insurance industry experience when he began his current role at Next in April. He believes the agency channel’s largest pain point is controlling and managing a large amount of microbusiness. His goals are to show agents how to take care of the different categories of small businesses in different ways and grow relationships.
“You have a discussion around small business, and oftentimes, the first reaction is, ‘We have enough small business carriers. We don’t need another small business carrier. In fact, we have too many,'” Ramsey said.
“But then helping them understand the difference between small business and micro, and confirming the pain point that I already know they have, which is to take care of that micro space. And what if I could provide a solution for you that is 100% digital, saves you from having to leverage service centers from across dozens of carriers at an expense, and allows you to service it the way you want? Would that be helpful? And the answer is always ‘yes.'”
Ramsey’s big message is that solutions exist that can help agents and brokers with “the part of their agency that is the most (transactional), busiest, low revenue part.” Next can help them, he said, create a revenue stream in the micro-small business sector.
Next Insurance recently announced its integration with Ivans Download for general liability and workers’ compensation policies.
According to a press release, this feature offers a seamless exchange of policy data between Next and its appointed agents. With this integration, any time a policy change occurs, Next will send the associated data, including customer information, limits, coverages, new policy sales, cancellations, reinstatements, premium changes, etc., directly to the agents’ Ivans Exchange account.
Agents using agency management systems that offer real-time delivery of download data can now receive hourly updates. Once configured in their agency management system, accounts will be automatically updated, eliminating any manual data input or processing of bound policies.
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