In my last blog, I discussed the super delegates in the presidential race and how the concept of the super delegate fits very well within the realm of commercial insurance. We discussed how aggregators, and digital agencies (such as Insureon and CoverHound) are the super delegates’ equivalent because they have the potential to extend the reach of an insurer, when compared to a traditional agency. In fact, we refer to these channels as digital agencies, because they operate much like the traditional agency, from the standpoint of cultivating new commercial business.
Re-introducing the Digital Footprint
Whenever I use the term digital footprint, I try to be careful to define it because its common consumer meaning is different than the commercial meaning. Where the consumer meaning indicates a “visible trail of data,” an insurer’s development digital footprint includes every effort we have made to make the organization digitally prepared, with the right back-end capacity and integrations and the right front-end capabilities. Our digital footprints are the places on which we digitally stand — digitally ready to transact, inform, serve and sell. Many commercial insurers are in the midst of establishing digital footprints that will allow them to transact business through new channels. Others are simply wondering what this kind of preparation will look like. We commonly hear questions like this:
“If we want to prepare our company to quote and sell through Insureon, what steps will we need to take?”
Digital presence enablement for insurers often involves the creation of new channel options and the building of mobile solutions. But for commercial insurers, the technical preparation must be matched with a corresponding strategy for market and product development. I’ll explain why in a moment.
Before a commercial insurer sets out to move in this direction, there are preliminary steps it needs to take, the first of which is to ask and answer some important questions. These questions will allow the company to assess its readiness to move in ways which may not always be comfortable. For example, one important question commercial insurers need to answer is,
“Are we comfortable competing in a productized marketplace?”
Aggregator usage is predicated upon some standardization in options. Commercial insurers are commonly adept at customizing solutions that fit their policyholders. Their products don’t automatically align with joint quoting engines. If they want to enter the competitive fray and truly benefit from these channels, they will have to define products more narrowly and definitively. Some commercial insurers will have no problems doing this. Others will have difficulty. Either way, an insurer must weigh its options.
“If we’re exposing the world to our insurance “secret sauce” by being transparent though a comparative channel, which kinds of products are we comfortable exposing?”
Not surprisingly, this one question has held many insurers back from creating new sales models within the organization. When you decide to sell through a digital agency, you are also deciding to allow your competitors to peek through the blinds and into your formula for insurance success. Someone at a competing home office can sit and run quotes all day long in an effort to figure out how your organization prices and quotes based upon certain criteria. (It is highly likely that once you partner with an aggregator, someone in YOUR home office will be running those same quotes just to make sure you are staying competitive.)
However, if you have a productized solution, they can’t assume that the product they are viewing acts like your full product portfolio. For that reason, it may be best to develop an entirely new product for sale through digital agencies and aggregators. This will keep your primary business safe from scrutiny, while allowing you to test productized offerings.
“Our products are complex and our client type is diverse. We can’t imagine trying to fit our products into a mold that will allow for easy quoting. Where should we start?”
Focus on the small business.
Large companies know the complexity that goes into insuring their operations. They will be slow to begin searching online for quotes, when they know that an online questionnaire isn’t going to cover all of their special circumstances. Small businesses, on the other hand, will be the first to shift away from the traditional agent relationship to price shop online. The small business purchase is likely to be made by someone who is making the decisions on his or her own, without oversight. They are already a digital consumer in every other realm. They will quickly feel comfortable once they know that comparison sites exist.
Clearly, they also require fewer questions for quoting. The small advertising agency, for example, may only need errors and omissions insurance and a small general liability package. A dry cleaner that needs only worker’s comp and liability fits a popular mold and will be easier to quote. Developing products to fit the mold won’t take a tremendous amount of time in evaluation, design, validation and testing.
As added incentive to insurers, the SMB market is massive — with over 30 million companies. Though the premiums may be lower than average, the volume has potential.
Just focusing on small businesses, however, isn’t really enough to carry you through. Just as your organization has strategized on its niche market segments, it will take a good marketing strategy and clear plan to integrate new products and methods within the current organizational structure. The digital shoe needs to fit the business foot before your digital footprint will make valuable tracks.
“What if we determine that now is not the right time?”
Even if you decide that now is not the right time to chase the super delegates and compete in this space, now IS the right time to prepare your digital footprint. As we mentioned in our last blog, all of the steps you take in preparation will also benefit your traditional agent channels, your call center and your own digital/mobile/internet brand management. What’s good for the aggregator is good for the Agent and the entire organization. You’ll bring consistency to your brand experience and give digital experience to your IT, operations and marketing teams.
If you’re ready to design your organization’s digital footprint, or if you see a digital agency partnership on the horizon, contact Majesco for information on how we can prepare your company to capitalize on commercial opportunities.