the article forgets to mention we’ve hit that part of the 12 year cycle. Let’s see, if I’ve got my memos correct… 2015’s cinderella product will be work comp for the dealership. Of course I’m getting old and might have the cycle a bit backwards… It might be construction.
Good article Chris. For us, the key to servicing small commercial has been a technology driven workflow. We work with carriers that allow fast online quoting and simple policy issuance. We us e-signature on applications and proposals and email policies to customers when issued. We can profitably write accounts in the $1k to $50k range and maintain service standards.
‘Agents do not shop small commercial as much so they can raise rates without fear of the business leaving..’ Written by someone that’s never been a commercial underwriter.
Is this an article or an editorial? Small accounts are often the most price sensitive, so I don’t buy the bit about “Agents do not shop small commercial as much”. That’s BS.
They are the most price sensitive, but agents usually won’t market them unless prompted by the insured. It’s not cost effective to market every small account renewal and you usually don’t find out they’ve found a better price until you lose it. That’s why it’s churn and burn business. You’ve got to constantly be writing new to cover what’s going out the back door. Automation is the key.
This is a good article, but there were a few key things missing. Price competition is important, but the improved ability to more accurately and efficiently price small accounts should be considered. The efficiency of current rating tools and the details captured help underwrite small accounts with more confidence, speed and accuracy. Large numbers of small volume accounts help stabilize results. On the other hand, mandatory experience rated and optionally retro-rated larger accounts have associated rating costs that may cause earnings drags when competition is excessive.
I’ve been telling our company reps for years the due to the economic conditions, the fastest growing sector of business was start up/small business. Sounds like the carriers are finally starting to think about thinking out of the box….no I am not a consultant!!
And yes I will echo previous comments, show me a customer who isn’t price sensitive!
I agree that there are tremendous opportunities for both growth and profitability. As for “stickiness”, the whole key is making it easy for the client, agent and underwriter. There are not a lot of markets doing this segment really well. Easy includes mobile options, instant multiple quotes as well as instant customized policy issuance delivered electronically. Let agents stick to the selling not the paperwork.
So many carriers now offer “service centers.” I wonder if agencies new found love for small business is because they know they can write them, then dump them into a service center. The article does talk aboutt his a bit. Frankly, I am amazed by the Service Center phenom. For example, the Carrier that manages the service center takes on much of the E&O risks. What if an insured was in a service center for three years… then one day, they buy 4 new autos and add them via the service center. What if the service center does not advise adding an umbrella. Then if there is a claim, the insured sues claming no one advised them to purchase increased limits. It is odd to me that a carrier is willing to take on that much work (to manage the service center), and E&O exposure. If carriers are loyal to the independant agent system… then why are they offering to service the indipendant agents clients for them? No days carriers may not yet be direct writters, but they have become direct servicers. I do not see that this trend is good for our industry long term.
the article forgets to mention we’ve hit that part of the 12 year cycle. Let’s see, if I’ve got my memos correct… 2015’s cinderella product will be work comp for the dealership. Of course I’m getting old and might have the cycle a bit backwards… It might be construction.
Good article Chris. For us, the key to servicing small commercial has been a technology driven workflow. We work with carriers that allow fast online quoting and simple policy issuance. We us e-signature on applications and proposals and email policies to customers when issued. We can profitably write accounts in the $1k to $50k range and maintain service standards.
‘Agents do not shop small commercial as much so they can raise rates without fear of the business leaving..’ Written by someone that’s never been a commercial underwriter.
Is this an article or an editorial? Small accounts are often the most price sensitive, so I don’t buy the bit about “Agents do not shop small commercial as much”. That’s BS.
They are the most price sensitive, but agents usually won’t market them unless prompted by the insured. It’s not cost effective to market every small account renewal and you usually don’t find out they’ve found a better price until you lose it. That’s why it’s churn and burn business. You’ve got to constantly be writing new to cover what’s going out the back door. Automation is the key.
This is a good article, but there were a few key things missing. Price competition is important, but the improved ability to more accurately and efficiently price small accounts should be considered. The efficiency of current rating tools and the details captured help underwrite small accounts with more confidence, speed and accuracy. Large numbers of small volume accounts help stabilize results. On the other hand, mandatory experience rated and optionally retro-rated larger accounts have associated rating costs that may cause earnings drags when competition is excessive.
I’ve been telling our company reps for years the due to the economic conditions, the fastest growing sector of business was start up/small business. Sounds like the carriers are finally starting to think about thinking out of the box….no I am not a consultant!!
And yes I will echo previous comments, show me a customer who isn’t price sensitive!
The article has merit, but there is no such thing as a 100% retention in the insurance world!!!
I agree that there are tremendous opportunities for both growth and profitability. As for “stickiness”, the whole key is making it easy for the client, agent and underwriter. There are not a lot of markets doing this segment really well. Easy includes mobile options, instant multiple quotes as well as instant customized policy issuance delivered electronically. Let agents stick to the selling not the paperwork.
So many carriers now offer “service centers.” I wonder if agencies new found love for small business is because they know they can write them, then dump them into a service center. The article does talk aboutt his a bit. Frankly, I am amazed by the Service Center phenom. For example, the Carrier that manages the service center takes on much of the E&O risks. What if an insured was in a service center for three years… then one day, they buy 4 new autos and add them via the service center. What if the service center does not advise adding an umbrella. Then if there is a claim, the insured sues claming no one advised them to purchase increased limits. It is odd to me that a carrier is willing to take on that much work (to manage the service center), and E&O exposure. If carriers are loyal to the independant agent system… then why are they offering to service the indipendant agents clients for them? No days carriers may not yet be direct writters, but they have become direct servicers. I do not see that this trend is good for our industry long term.