Boston, MA, USA
July 3, 2001
Web-Enabling Small Business Insurance Policy Origination
Report Published by Celent
Celent Communications offers the first in-depth look at the
potential for selling small business insurance online and six of the new
companies that are enabling this market
Web-enabling small business insurance has the potential
to make it easier for carriers and agents to reach the what Celent terms
the "Upper SOHO" market - the 5.7 million US small businesses
with annual revenues between $50,000 and $500,000.
 With average annual insurance spending of $2,000
each, Upper SOHO businesses in the US represent a $11.4 billion market for
carriers and agents. But a fundamental disconnect in the current
distribution model keeps carriers from being able to reach them
effectively.
While it is profitable for carriers to offer coverage to
these businesses, many of which are low-risk, it is currently unprofitable
for agents to serve them, since commissions are not big enough to cover
the expenses of prospecting and time spent on meetings and quote
requests.
The added efficiencies of the online channel have the
potential to resolve this conflict. Celent predicts that 30% of the Upper
SOHO market will buy business insurance through online channels by 2005,
generating $3.8 billion in premiums.
"Unlike some of the early consumer web insurance
plays, small business web initiatives are about making the agency model
more efficient, not displacing it," says Celent analyst and
author of the report Matthew
Josefowicz. "The Online Agencies and Online Agency Enablers
are working within the existing structure of the insurance industry, but
offering significant efficiencies."
The report examines the market place for web-enabled
small business insurance sales, traces the evolution of the marketplace,
analyzes the strategic importance of this new channel to agencies,
carriers, banks, and portals, and profiles six of the current players in
the market place: InsureHiTech, ePolicy, Access CoverageCorp,
InsureZone, Insurance Noodle, and Financial Keyosk.
A Table of Contents
is available online.
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