The research yielded a number of insights that insurance professionals can use to design their strategy for approaching the small commercial insurance market. For example:

The universe of potential shoppers and switchers far exceeds the 6% who actually switch. The decision-making process for the small commercial insurance customer often parallels the decision-making process for the personal Auto insurance customer. Customer loyalty often relies more on customer inertia than in actively shopping around, and the challenge for carriers will be to identify the customers who would be willing to switch carriers for a good reason.
Customer needs and behaviors are nuanced and present untapped marketing potential. But carriers must be able to take advantage of the volumes of data that they've gathered and use it to obtain more granular information about customer behavior. Currently, small commercial carriers segment their clients by size or industry while McKinsey's research showed that the two factors with the most polarizing impact on segmentation are price sensitivity and reliance on agents. The more information and insight that small commercial insurers can bring to segmenting their potential customers, the less they will need to spend on maintaining and gaining share.
Retention is a powerful hidden lever. The vast majority of small companies make their decisions based on loyalty, according to McKinsey's findings. Of the 94% who renew with their incumbent carriers, 82% do so without shopping. This means that investments in retention can deliver better returns than investments in acquisition.
Consumer demand for alternatives to agents exceeds supply. Almost 70% of small commercial insurance customers are gathering information for their decision-making through non-agent channels, including online, and almost half of these shoppers are using both agent and non-agent channels. About 50% of the survey respondents would consider interacting directly with a remote or virtual agent.
Consumers see products as over-complicated and feel unprotected against emerging risks. Many customers want to simplify the process for getting the right combination of products and coverages. They indicated that most of their interactions with agents involve constructing the optimal combination of lines, identifying and modifying the required coverages, and then procuring the package at the most competitive rate. Among emerging risks, cyber is the most troubling to small commercial decision-makers, followed by slander and liability via social media.
Partner to fuel growth. One product-related insight from the research was that 40% to 50% of customers would be comfortable buying health insurance products from their P&C carrier or buying commercial P&C insurance on a healthcare exchange, depending on the choice of carriers and quality of coverage. These results indicate that there are opportunities for carriers to drive growth through strategic partnerships outside the P&C insurance industry.

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Insurance for small businesses a growth opportunity, report says

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