Commercial Insurance: Who Will Buy Direct and Why?

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11 December 2020


Insurers looking to the future agree that changing customer expectations will require them to focus more heavily on the customer experience. Almost half believe that direct-to-consumer insurance sales will rise, and a quarter are also concerned about the rising cost of the agent channel.

Just as personal lines has become commoditized and moved to a world of digital distribution, the online sales of small business and workers’ compensation insurance is fast increasing. There has been an explosion in online offerings—from online agents, to managing general agents (MGAs) to insurers.

But is this just a finger in the wind testing the opportunity? Or is it real? Just because you build it doesn’t mean they will come. Our initial question was: How interested are small business owners in buying direct? And if they are interested, what matters to them? If they are not, why not? What do agents need to do to keep them as clients? What do insurers going direct need to offer in order to convert them? We launched a study in August 2020 to uncover answers to these and other questions.We surveyed 190 small business owners about their current buying practices, attitudes, and preferences when it comes to purchasing insurance.

The rich data set from this research can guide insurers as they think through how to approach the acceleration of digital direct for small commercial. The key lessons drawn from the data are: