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Finding growth in small commercial insurance markets

Five strategic options for carriers

Today’s insurance industry faces wide volatility—from macroeconomic conditions to evolving customer expectations to innovative incumbents and beyond. Discover five ways carriers can adapt and grow in the small commercial insurance market amid these challenges.

The ever evolving commercial insurance landscape

Since 2020, the property and casualty (P&C) insurance market has experienced significant volatility in underwriting profitability. The commercial lines market has also experienced headwinds in loss trends, and a more flexible regulatory environment and strong underwriting discipline have enabled profitable performance among the top-performing commercial insurance market players—driving a 94% industry combined ratio in calendar year 2022, a better performance of 15 percentage points compared to the personal lines combined ratio of 109%. Within the commercial insurance sector, the small commercial insurance market could provide an alternative source of growth for insurance carriers looking to expand their business portfolios.

To maximize opportunities for growth in today’s small commercial insurance market, here are options for how carriers can approach the market.

For small business owners (SBOs) looking for a carrier who knows their industry, provide the most comprehensive suite of industry-relevant products, solutions, and services required to effectively protect their businesses.

For agents looking for the best experience, provide a seamless agent portal and a best-in-class servicing experience to become their preferred carrier.

For cost-conscious SBOs, provide the best price-to-coverage ratio in the market, along with the best product and police flexibility to suit SBO needs.

For companies serving small businesses, offer embedded or white-label insurance products to maximize the intermediary’s overall value proposition to its small business customers.

 

Offer a streamlined insurance experience through an end-to-end digital platform, and serve as a partner that can support them through their journey.

The path forward

Winning in the small commercial insurance space requires carriers to stand out in a competitive market and keep pace with the needs and expectations of growing small business owners and agents. To successfully undertake this endeavor, carriers should maintain a deep understanding of small business owners and address their specific coverage and protection requirements. Leading carriers in this space should also build agility in their operating processes across the agent and client journey, especially investing in technology, data, and analytics capabilities. Lastly, to win in small commercial insurance, carriers will need to simplify their product offering and overall business owner and agent experience across the value chain, ensuring interactions become seamless.

Read the full report to understand what it would take for carriers to play and win in small commercial insurance.

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