Consumer Journey Commercial/Business Insurance

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Consumer Journey Commercial/Business Insurance

Germany

In Germany, commercial is regularly purchased by business owners or executives via in-house or captive brokers. The largest influencer in this decision is the insurance broker or agent themselves, as businesses tend to place a lot of trust in these individuals. The insurance purchasing process is generally completed offline, but increasingly involves a multichannel approach.

Direct vs Broker

  • In Germany, it is common for companies to utilize in-house/captive brokers for commercial insurance purchases.
  • Captive brokers in Germany were made common in the 1960s when "federal law made it illegal for brokers and insurers to share commissions or make other payments to insurance buyers. Prior to the passage of the law, to secure a competitive advantage, brokers and insurers were able to make partial reimbursement of commissions to insurance buyers in an effort to win or maintain business. By forming captive brokers, buyers were able to keep the commission reimbursements in place."
  • Captive brokers are heavily utilized in Germany by large companies, while smaller businesses in Germany obtain commercial insurance commonly via agents.

Main Decision Makers

  • In general, decisions about purchasing commercial insurance falls to the owner or founder of the company.

Influences

Common Client Questions/Concerns

  • Top concerns for business owners in Germany include business interruptions, cyber incidents, and natural catastrophes.
  • Businesses are also concerned with how the business insurance can be specifically tailored to their industry and business needs. This was assumed because it is the first highlighted information for commercial insurance on insurance giant Allianz's website.

Channels

  • In Germany, most people use a mix of online and offline channels to collect information and make their insurance purchasing decisions. However, even with digital becoming an important touchpoint on the consumer journey, commercial insurance especially is generally purchased via offline brokers.
  • 84% of people in Germany report that they utilize online media at some point during their insurance purchasing journey, but 55% reported having no interest in buying insurance online. Therefore, the majority of Germans prefer to start the process online, but then switch to face-to-face or phone interactions with a live person to complete the purchase.
  • Germans appreciate the personalized experience that comes from purchasing insurance offline and the relationship they have with their agent/broker. In some cases, Germans felt that the products they needed were simply too complex to purchase online, or that they didn't have enough information to complete an online purchase.

UK

In the UK, insurance is generally purchased via a broker but online channels, such as price aggregators or direct purchase portals are becoming increasingly important. The number one consideration for businesses in the UK when purchasing insurance is that they are receiving a "good value".

Direct vs Broker

  • Brokers are the most common method of purchasing commercial insurance in the UK, with brokers controlling 86% of UK commercial insurance premiums.
  • Medium sized insurance brokers are gaining market share in the UK, while larger brokers are loosing market share, as smaller brokers adapt to use new technology to attract clients.
  • However, banks and price comparison websites (aggregators) are challenging the dominance of brokers in the UK, especially for simple small businesses.

Main Decision Makers

  • For smaller businesses in the UK, the owner or founder is generally responsible for insurance purchasing decisions, while for larger corporations, corporate buyers, whom report to corporate leadership, are generally responsible.

Influences

Common Client Questions/Concerns

  • Top concerns for small businesses in the UK looking for commercial insurance include efficient service and timely payments in the event of claims.
  • Small businesses are also looking for "good value" in their insurance products and are price conscious, especially since the COVID-19 pandemic.
  • Very small businesses are extremely price-sensitive and this is their driving purchase consideration.
  • Larger businesses look for products that can be tailored to their business and also desire the advice and knowledge of their agent/broker for risk management.
  • Commercial insurance clients are increasingly interested in specialty insurance such as cyber insurance, gig economy insurance and specialized SMB insurance.

Marketing Channels

  • Digital channels are becoming increasingly popular in the UK for commercial insurance, especially for small businesses.
  • There has been a decline in telesales as a marketing channel for commercial insurance. Social media is increasing in importance for the commercial insurance industry.
  • 50% of small businesses in the UK reported purchasing their most recent small business insurance either in-person or over the phone, while 43% reported purchasing it online. This illustrates the importance of digital sales channels for commercial insurance in the UK.

US

In the US, commercial insurance is most commonly purchased from a broker, but direct, self-service purchases of commercial insurance are increasing, especially for small businesses. Insurance purchasing decisions are generally made by business owners themselves, but may also be made by managers within the business. Online and mobile-optimized channels are increasingly important for commercial insurers to focus on.

Direct vs Broker

  • In the US, 73% of commercial insurance is distributed by a broker, while 27% is non-broker.
  • However, small businesses are increasingly purchasing insurance directly in a consumer journey that parallels the purchase of personal auto insurance in many ways. Many of these customers want to do research by themselves and avoid interacting with a sales rep.

Main Decision Makers

  • Insurance decisions are generally made by business owners, especially for small businesses, but may also be made or recommended by managers within the business.

Influences

  • A major influencer of purchase decisions for commercial insurance is the insurance agent or broker, especially if the purchaser already has a relationship with the broker/agent. Many small business owners even look to purchase commercial insurance through their personal home or auto insurance provider due to their existing relationship with the agent.
  • Carrier reputation is also extremely important, especially for highly specialized industries and larger businesses.
  • Finally, purchasers are also influenced by recommendations from other business owners, especially businesses in their industry.

Common Client Questions/Concerns

Marketing Channel

  • Online channels are increasingly important for commercial insurers, both for attracting new customers and for improving the customer experience of current customers. Many commercial customers do some research online, even if they eventually purchase via a broker or in-person.
  • For current customers, it is important for them to be able to "track the status of interactions in real time instead of having to make inquiries by phone, email, or through their brokers."
  • For small businesses especially, mobile is becoming an increasingly important channel. It is expected that by 2020, 70% of B2B search queries will be made on mobile devices.

Switzerland

While very limited information was available about the commercial insurance market in Switzerland, the research team was able to determine that insurance brokers are commonly utilized, but that direct purchases are growing. Additionally, commercial clients in Switzerland are concerned with personalized insurance that meets their specific industry risks, as well as high-quality customer service.

Direct vs Broker

Common Client Questions/Concerns

  • Businesses in Switzerland appear to be most concerned with insurance products that are specifically tailored to their business. This was assumed as it is what is stressed by Swiss Re in their content aimed at commercial businesses.
  • Based on the other elements stressed by Swiss Re, commercial clients in Switzerland are also concerned with risk management and high quality customer service.
  • In terms of customer service, Swiss businesses appear to be interested in transparency by their insurance broker and a quick, efficient claims process.

Marketing Channels

  • In Switzerland, 75% of small businesses bought their most recent commercial insurance policy face-to-face with an agent, while only 11% purchased it online. 7% purchased over the phone.
  • However, especially for micro and small businesses in Switzerland, the online channel is becoming increasingly important, as illustrated by the launch of a new platform by Zurich Insurance Group in 2019 where "SMEs can quickly learn about the types of coverage they need, get real-time quotes, purchase insurance, and manage their policies online, in minutes."
  • In their 2019 investor-day presentation, Swiss-based commercial insurance giant Zurich Insurance Group stated that they would focus on "the build-up of new digital offerings and services" to improve customer experience, illustrating the increasing importance of digital tools and marketing for commercial insurers in Switzerland.

Research Strategy

The research team found that limited information was available for the Swiss commercial insurance market. We looked for market reports, industry news, and information on general trends in the commercial insurance industry in Switzerland, but found limited information for each. Therefore, the research team both utilized information on the general insurance market in Switzerland, believing that this information would also be applicable to commercial insurance, and made assumptions based on the marketing and statements of top Swiss commercial insurers, believing these insurers would have a solid understanding of their commercial customers. However, the research team was unable to identify any information on who the primary decision makers or influencers are specific to the Swiss insurance market.

Global Trends in Commercial Insurance Affecting the Purchase Journey

Two trends in the global commercial insurance industry that affect the purchase journey are an increase in direct sales capabilities for small business insurance and an increase in insurers utilizing AI-based risk management.

Increase in Direct Sales Capabilities

  • Small business insurance is increasingly being sold online through direct sales channels.
  • According to Novarica, 10% of the total small business insurance market may be sold via direct online channels by 2025, split between sales from digital distributors, regional or specialty insurers, and major carriers.
  • This is being driven in part by the shift how personal insurance is sold, as owners of small and micro businesses purchase commercial insurance in the same way they do personal insurance. They are looking for direct engagement channels as they desire "convenience, agility and personalization." They also desire low-cost products.
  • This is also being driven by the changing demographics of small business owners. As more small businesses are headed by millennials, insurers need to meet their desire to interact exclusively via digital channels.
  • One example of this trend is Progressive's BusinessQuote Explorer, which provides quotes from multiple carriers for business owners, professional liability, workers compensation, and general liability.
  • Another example is the partnership between Zurich Insurance Group and CoverWallet which allows small business to determine the type of coverage they need, get quotes, buy insurance and manage their policy.

AI-Based Risk Management Capabilities

  • Insurers are increasingly utilizing AI-based technologies to improve their risk management capabilities, capabilities such as continuous risk assessment, real-time risk monitoring and risk prevention.
  • These increased risk management capabilities can be passed on to clients in the form of sophisticated client tools, safety alerts and assistance in handling risk.
  • The increasing use of AI for risk management is being driven by the heavy cost of inaccurate risk assessments to insurers, coupled with the advancements in multiple technologies such as IoT, AI, drones, and data computation.
  • For example, Parsyl offers cargo insurance for perishable goods through IoT connected sensors and AI. It allows shippers to reduce risk and, over time, make changes for better shipping, while providing the right level of insurance based on the individual shipper's track record.
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