SME insurance- you can lead a horse to water, can you make it drink?

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If 40% of the U.S. and EU business owners do not have property and liability insurance, and 70+ % are underinsured, and the existing market is already more than US $60 billion in premiums, is there not an opportunity for growing the commercial line business, particularly for small and medium size enterprises (SMEs)?

Of course there is.

But how to get SMEs to get on board with the ideas that insurance is a key business need, is easily accessed, and is a value expense?

Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.

The economist says, “You don’t find any $10 bills on the sidewalk.”  Why?  Because the first person to see it would have picked it up.  Similar concept for business insurance for SMEs- it’s known that having insurance is a net benefit for a business, and if it was an easy sell in a traditional broker format someone would have already sold the businesses that comprise the uninsured 40%.

Accessing business insurance is becoming easier for those who are artisans, tradesmen, and service providers, even to the point where duration of policy, specific extent of coverage amount, who is insured and how are decisions that can be applied to app-based, on demand policies.  Next Insurance recently obtained significant funding to expand its MGA-based products into all 50 U.S. states, providing online insurance access to a variety of service providers and tradesmen- economically.  Thimble (formerly Verifly, drone insurer) offers short-term liability cover in a market that typically provides annual policy periods.  On demand, by the job cover, and the company’s recent funding round by IAC provides it resources to expend its market coverage.  Simply Business is a digital broker that gained traction in the UK and is expending its market into the US.  All good options, and all easily accessed.

All three of the firms facilitate insurance cover for SMEs, but how to prompt the firms to decide that insurance is not an option, but a business requirement?  And, consider (philosophically) that on demand products meet clients at a highly valued place and that’s business on their time frame not yours. Agent/colleague Joe Hollier notes a concern with entrants like Thimble and Next Ins is that the customer is taking insurance matters into his/her own hands- even more reason traditional agencies need to market (and execute) relationship building. Relationship building is everything for the indie agent.  Traditional brokers find that firms like Coverwallet and Attune are apt options for SME policies (thanks for the information, Brett Fulmer), but how to get the horse to the figurative water, and get the beast to take a drink?  Broker business reflects the market as a whole- the product is typically sold, not bought.  Certainly, contractual or legal requirements for coverage and associated provision of insurance certificates removes the reluctance, and improves the project by project option that firms such as Thimble can provide.  Past practices of having to purchase liability cover by the year have for some SMEs been a barrier to having the coverage, and also the need to reach out to a broker to arrange a certificate.  An app-based cert option as provided by the online carriers makes the action simple.

Perhaps the time has come for the SME opportunity to be the foundation for online business ecosystems?  Perhaps leverage referral platform relationships such as Angie’s List in the U.S., or WhoDoYou in the UK for insurance referrals, and vice versa?

Fortuitous timing by those good folks at Coverager.com regarding this discussion- here’s an actual customer comment noted in the 11/06 Coverager edition:

“Maybe needing commercial insurance is obvious to most people and I’m just some back-water dumbass, fine. I’m an idiot.”

Maybe not. Educate your target market or someone else will be doing the educating for you.

Innovation is not just tech- is the innovation option for SMEs a hybrid of opportunity, acquisition and application?  The multi-billion dollar question.

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