How to compete in the new commercial insurance industry

It’s difficult to stay competitive in the ever-evolving commercial insurance industry as decreasing premium rates create lower profit margins for insurers. That’s on top of an increasingly cost-conscious, commoditized and fickle market environment.

Insurance agencies need to spend time planning and implementing marketing and sales practices that result in a predictable and sustainable pipeline of new leads and relationships, rather than spending time chasing clients who don’t want or need new insurance.

The following three tips will help commercial insurance agents and agencies stay competitive in the changing commercial insurance industry, diversify their lead generation strategy, and win new business:

No. 1: Maximize digital tools.

Having a digital strategy can help commercial insurance agents remain competitive. While many insurance companies still heavily rely on paper, embracing digital can drive down costs, refresh the business image, improve productivity and strengthen customer service.

In fact, a survey by Centric Digital found that roughly four out of five consumers expect to use online resources for insurance purchases in the coming years.

Start by creating an outline detailing the entire claims process. This initial step will help guide the design of your platform, which you will likely outsource to a web development company. Cost and time are dependent on the overall scale of the project, but it has proven to pay off in the long run.

No. 2: Understand your consumer.

I often see commercial insurance consumers grouped into two key behavioral categories: those who see insurance as a service, and those who view insurance as a product. The first type of consumer looks for comprehensive risk management solutions and thus view insurance as a set of services that can lower their overall exposure to loss. The latter type of insurance consumer looks for the best and easiest way to cover their assets.

Since the insurance industry performs and delivers people-based services, typically, it is easier for insurers to position themselves as selling a product. By optimizing customers’ insurance-buying experience while maintaining high-quality relationships, however, customers will see their insurance agent as the best and easiest way to gain the coverages they deserve.

No. 3: Small business insurance matters.

I often see agents skip over the small business insurance market in the hopes of securing bigger accounts. However, the small business market still accounts for an estimated $100 billion of direct written premium, according to Verisk.

Make sure you understand how the small business owner mindset differs from larger commercial markets. For example, they want to know they’re covered and do not want to have to think about insurance as they tend to their business.

Build trust. Convince small business owners of their needs (e.g. personal lines vs. commercial lines) and simplify underwriting through back-end tools such as prefill forms, straight-through processing and advanced technology. This will help scale success within the small business industry.

Related: 3 ways insurance agents/brokers can embrace tech to better serve clients

Travis Batiza is co-founder of AssuredLeads in Madison, Wis. He can be reached by calling (608) 237-1626 or sending email to Travis@AssuredLeads.com. Opinions expressed are the author’s own.