Small commercial insurers are in a unique position. While the personal lines segment often pioneers the latest innovations, small commercial carriers are frequently at the forefront of change in the commercial market before technologies reach mid/large commercial risks. In the past few years, small commercial carriers have progressed significantly in applying straight-through processing (STP), digital self-service capabilities and other capabilities in certain areas of their business, particularly distribution. But the ever-evolving distribution landscape demands technology solutions to support channel partners and optimize business processes. So, where are small commercial insurers focusing their technology investments today?
A recent survey of executives at small commercial lines insurers reveals some shifts in what is driving distribution investment decisions this year. According to the "Distribution Technologies for Small Commercial Lines: Carrier Plans in 2023 and Beyond" report, nearly all small commercial insurers say improving the customer experience for the agent/broker is one of their top business drivers for tech investments. This is an increase of 20% over 2021 and indicates how the industry is becoming more experienced-focused.
At the same time, insurers also recognize the importance of balancing partner priorities with their own. It follows that 75% of insurers are driven by efficiencies/enabling more STP. Increasing operational efficiencies allows underwriters to devote more time to servicing customers and reduces friction points for agents and policyholders by allowing them to access quotes, endorsements and billing more seamlessly. However, carriers indicated decreasing satisfaction with their policy inquiry capabilities, suggesting further investments can be made to focus on elevating processes.
See also: A Frenzy of Activity in Commercial Lines
However, in a shift from 2021, fewer small commercial insurers – slightly over one-third – cite growing their market share as a driver of tech investments in 2023. But that is not to say it is unimportant. The data clearly shows that insurance carriers have different priorities and are in various stages of expanding their distribution landscape but remain committed to customer experience and increasing efficiencies.
"Distribution Technologies for Small Commercial Lines: Carrier Plans in 2023 and Beyond" is part of SMA's research series based on surveys and interviews of insurers, agencies, brokers, MGAs and others in the distribution channel, including insights from ReSource Pro's extensive footprint of distribution clients.