With technology solutions firmly in place for personal lines insurers—and more likely to come—it seems like it's time to turn to small commercial lines. In the last month, not one but two research and consulting groups—Deloitte and Novarica—have issued reports predicting technology changes that will bring major changes to the market, such as direct sales, in the next three to five years.
There certainly is no reason to doubt Deloitte or Novarica—or Celent, for that matter, since they beat the other two to the punch a year ago by predicting similar changes in commercial lines.
Automation is changing all insurance markets and to think that commercial lines would somehow be immune to advances in technology is ridiculous.
Justin Manley, CIO of Torus Americas—who will be featured in an article later this week on how the carrier built a strong IT team—points out that small businessmen offer a closer resemblance to personal lines customers than they do those that run larger commercial businesses. They are used to doing nearly everything online.
“These people are consumers in their everyday lives and they are going to the Internet, so why is insurance unique?” asks Manley. “The world is changing and so is the person starting up a new business. They are going to expect to go online and those (insurers) that are there first will be there to capture the business.”
There is no doubt that much of the commercial lines is complex and no matter how many business rules you apply to online underwriting, brokers are going to remain the predominant sales channel.
In interviewing Manley, he points out that Torus Americas has no plans in place to turn any of its coverages into a direct writer model, but smart people know that the technology revolution in business has yet to reach its peak.
Those that don't explore the boundaries of technology will find themselves trailing their competitors.
As Manley states, “I won't say Torus is going direct anytime soon; that's not part of our business strategy. But I think [the industry] is headed that way and we have to be watching the waves as they roll in.”
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