Sep 19, 2014 - small businesses in the U.S., small com- ... service providers â agents appreci- ate more than ever tha
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September 19, 2014 Vol. 275 No. 7
SMALL BUSINESS COVERAGES
Six Strategies for Riding the Sea Change in Small Commercial
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By Michael Keane
he strong, constant tides continue to shift in small commercial, with agencies seeking to write business as efficiently as possible, with many successful agencies growing through consolidation and with some carriers competing for business through alternate distribution channels. Whether an agency is growing organically or through consolidation, with more than 28 million small businesses in the U.S., small commercial represents a significant growth opportunity. Many agents who have been able to capitalize on the opportunities for growth in small commercial share a commitment to several best practices. These strategies include:
through giant retailers like Walmart, and through a host of payroll and other service providers — agents appreciate more than ever that some carriers are building their businesses specifically around the needs of agents and their customers. They recognize that carriers that focus their distribution on the agency channel bring valuable market insight and product and services designed specifically for their customers. The alignment between independent agents and carriers focused on helping them compete and win — selling value in the face of the many alternate distribution channels — enables agents to grow their businesses in profitable and sustainable ways.
Partnering with a carrier that wants them to be successful. More and more, agents are expressing interest in working with carriers that are truly committed to the independent agency channel and to helping them achieve their goals. Given the emerging trend among some carriers to build alternate distribution channels — going direct,
Leveraging service centers. An increasing number of agents who are successful in small commercial are incorporating service centers into their agencies to maximize their operational efficiencies. Not all service centers are created equal, however, and the most successful agents carefully evaluate service center capabilities and
operational fit before committing to a carrier’s service center. The best, most flexible service centers will give an agency great leverage. The better carriers in the market offer service center capabilities that, among other things, can help agents offer the total account solution and other specialty coverages to their customers. This way, an agent can ensure that his or her customers are being offered the best possible insurance coverage and service without draining already limited resources at the agency. Offering a broad and flexible product platform. High-quality insurance coverage does not come in one size that fits all. While many customers are well served by a businessowners policy, others require more complex insurance solutions. The best agents in the small commercial space understand their customers’ needs and work closely with their carrier partners to provide the right coverage for each customer. They leverage both businessowners policy (BOP) and Standard Publishing Corporation www. sp c p u b .c o m
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SMALL BUSINESS COVERAGES
commercial package policy (CPP) platforms, ensuring that they provide their customers with the insurance protection they need. Looking for ways to leverage risk management solutions. Increasingly, independent agents who are committed to building their small commercial books recognize the opportunity to provide risk management services for more complex risks, typically at the upper end of the market. Often, technology, marketing, and sports and recreation companies, for instance, benefit from risk management services. Many of the best agents are partnering with carriers to offer risk mitigation advice and best practices for business owners who may not have risk management professionals on staff. And, carriers focused on working with independent agents on more complex business are offering risk management solutions for agents to use with their customers, including webinars, e-Learning training sessions, on-site
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support and whitepapers. Agents can leverage their own expertise while using resources provided by both their carriers and other key partners to create full risk management offerings. Partnering with a carrier that offers true consolidation capabilities. Given the increasing trends in agency consolidations, the best agents are looking for their carrier partners to help them through integrations. Many carriers will claim they can help agents in this area. However, few carriers have the dedicated and specialized resources needed to help agencies migrate and manage the business. Agents ultimately will improve their economics by working with carriers that can help them effectively manage consolidation activity. Looking for focused underwriting and sales teams. Small businesses are the heart of Main Street America. Business owners turn to their agents as local experts who can help guide them, and agents partner with
carriers that have expertise in small commercial and offer local underwriting and sales teams to support their agencies. Typically, these carriers will know the intricacies of the local market and understand the unique nuances of small commercial. Furthermore, these carriers will be able to offer competitive, market-based pricing that minimizes disruption for an agency’s customers, rather than relying heavily on “black box,” predictive modeling to drive underwriting and pricing decisions. Small business continues to be the life blood of the U.S. economy. The sheer size of the small-commercial market represents tremendous opportunity for agents. By refining their processes and applying industry best practices, winning agents can benefit and win, creating stronger agencies and a brighter future. ■ Michael Keane is the president of Small Commercial, at The Hanover Insurance Group in Worcester, Massachusetts.
