Small business is booming in the US. The US Small Business Administration declared this week as “National Small Business Week” to promote the role that small business plays in the US economy. Why should insurance companies pay close attention to the needs of small business? For starters, small businesses mean:
- Big economic impact. Small business spells substantial opportunity. These small businesses comprise about 49% of private sector employment, and about 43% of private sector payrolls.[i] And as small business grow, that growth translates into the need for more insurance to cover employees, vehicles, and other liabilities.
- New revenue streams. With self-driving vehicles tests planned in 30 cities by 2017, there’s trouble ahead for the industry’s cash cow, private passenger auto insurance.[ii] Small business insurance is one revenue stream that insurers can increase to counterbalance premium declines.
- Reduced servicing costs. One of the top priorities for US insurers in 2015 is reducing costs (see Figure 1). It turns out that busy small business owners are especially digital, using a variety of digital touchpoints to learn about, understand, and buy insurance. What’s driving them online? Busy small business owners are all about productivity and cash flow, and digital technology helps them operate their businesses more efficiently.
In the run up to this week’s recognition about all things small business-related, we decided to take a look at just how effective small business insurance websites were when it came to winning, serving, and retaining small business customers. In March, we used our Digital Sales Functionality Benchmark methodology to evaluate online and mobile touchpoints of five leading US small business insurers: Liberty Mutual Insurance, Progressive Casualty Insurance, Selective Insurance Group, The Hartford Financial Services Group, and The Travelers Indemnity Company. What did we learn?
- The Hartford and Progressive leverage strong value props and digital capabilities. While every insurer site evaluated stood out for at least one best practice, Progressive and The Hartford offered strong performances when it came to differentiating their small business offerings, and simplifying a number of the steps that lead to a small business insurance sale.
- eBusiness teams need to improve digital functionality for small business insurance.Small business insurers are failing their customers. They are not delivering the online and mobile experiences that business owners expect, which have been shaped by their experiences as consumers, such as shopping, banking, and even buying personal insurance online. Even the top performers had areas to improve, especially around ensuring consistent micro-industry experiences.
- Small business insurance websites must be redesigned to drive digital sales.It’s time for executive management to get serious about investing in small business insurance now. Digital insurance teams should use this investment to drive near and longer-term improvements to sales, and keep small business owners engaged throughout the sales cycle.
Check out our new report, “2015 US Small Business Insurance Digital Sales Functionality Benchmark” to see what hits and what misses, when it comes to small business insurance sales. We also propose three simple near-term fixes and four longer-term initiatives that will drive small business insurance sales.
Interested in learning more? Join us for a webinar on Tuesday, June 23rd at 1:00 pm . We’ll cover what we learned and what insurers can learn from other industries targeting the small business buyer.