Tag Archives: B2C

Expanding Into Commercial Lines

In personal lines insurance, independent agents constantly face increased competition in an already congested market. Many of the competitors have the technology to provide the on-demand service that customers require. In addition to direct writers and others, massive companies like Google and Amazon continue to hint about re-entry into the insurance markets. The bottom line: For independent agents to remain competitive, they can no longer solely rely on selling personal lines.

Commercial lines offer agents another avenue for revenue, and it is a segment in which they can still dominate. According to the IIABA’s 21st Market Share Report, while independent agents wrote just over a third of personal line premiums, they wrote 83% of commercial lines premiums. Most business owners need a trusted adviser. When searching for an insurance agent, they want a knowledgeable resource who can work with them on the different aspects of their personal and business portfolios. If their current agents can’t handle multiple line needs, many will turn to agencies that can handle both lines of insurance.

But, for agencies looking to expand their book in commercial, the same techniques used to target personal lines clients will not work. Personal lines are fairly straightforward. If you build a good relationship with a prospect, have a reputable carrier to place him with and fall within a reasonable price, you have a good chance of winning him as a client–and having him refer you to family, friends and colleagues. For commercial, you have to know the product and the customer very well. You have to understand the specific business details and the risks it faces on a much deeper level. You also can’t rely on building referral to referral. Prospecting requires much more research and initial leg work before you can start cold calling and networking.

See also: Top 5 Themes in Commercial Lines  

For independent agents looking to expand from B2C to B2B, here are three best practices that will help you land commercial clients.

Master some, but don’t dabble in all

In commercial lines, each industry has its own specific risk categories, and the needs of different companies can vary greatly from each other. For example:

  • How many employees does it have?
  • Does it have business disruption issues such as supply chain or weather-related factors?
  • What is the employees’ safety risk and how will this affect workers compensation?

For many agencies, especially those just entering the market, focusing on one or two industries and selling a specific type of product such as BOP or workers’ compensation, can be an effective approach.

This allows you to become an expert in that particular area and build the right set of carriers that specialize in that focus, a key draw for prospects. It also allows you to narrow your focus and get ingrained in that community.

For example, if you wanted to specialize in restaurants, you could join the National Restaurant Association and subscribe to the top three restaurant trade publications. This would allow you to learn the pain points of restaurateurs on a macro and micro level. You could then create a compelling presentation for the prospect’s business owner or CFO on how your agency could benefit her in ways her current provider cannot. Closing that first lead will help you get referred to other restaurant owners, and soon you can build a client portfolio that will make you the go to restaurant insurance agent.

Promote your credibility — with the right technology

Technology is important in commercial lines – but since you’re dealing with clients one-on-one in a customized way, certain technologies are not as critical as they might be for selling personal lines.

But that doesn’t mean successful agents can rely on old-school tactics like pamphlets, mail and fax to attract clients. Companies are looking for agencies that exude expertise and credibility in their fields. Sending an email newsletter to commercial clients can keep them apprised of the latest developments and emerging risks in their industry as well as keep you top of mind. You should have an interactive, comprehensive website that is easy to navigate, details your expertise working in a specific industry and makes it easy for the commercial client to contact you. Other digital materials such as an agency blog and accounts on key social platforms like LinkedIn and Twitter dedicated to your business expertise will also demonstrate your knowledge in your focus area.

The right digital capabilities can also aid you in prospecting. If your website illustrates your expertise in insuring a specific business rather than just commercial insurance, in general, it will attract prospects searching for insurance in their specific industry. For example, a restaurant owner will most likely search for insurance for restaurants, not business insurance. Email marketing newsletters and risk management webinars can also further demonstrate your expertise in working with businesses and provide an opportunity to build relationships with prospects by providing them with insightful information that go beyond sales materials.

See also: Commercial Lines: Best Is Yet to Come  

Let clients dictate the terms and method of communication

All prospect relationships need to be nurtured to keep the lead engaged. You should be ready and able to communicate through whatever channels clients prefer. This may be traditional email or phone calls. But the prospect might need you to present your information to a group of leaders, and you have to be able and willing to travel to wherever that prospect may be. Or, the owner might want to quickly be able to text you a question, and you will have to have some plan in place for handling those requests. Companies might be using more modern video conferencing systems such as Skype or other video platforms. When pursuing a prospect, you should ensure you know the company’s preferred method of communication and make sure you have the capabilities to communicate with them on that platform.

As the insurance market continues to evolve, insurance agents who focus on a single line of business will struggle to keep up with the competition. Independent agents still dominate the commercial lines market, and branching out can provide new sources of revenue. Targeting companies is not the same as individuals – and agents will have to thoroughly understand their focus industry and products. But if they can demonstrate their expertise in a particular field, independent agents can grow highly successful commercial lines books of business.

10 Trends at Heart of Insurtech Revolution

As the insurance industry enters a period of profound change, we at Eos use a concept called the 20/20 dynamic to illustrate the point:

On a conservative basis, we believe most insurers risk losing at least 20% of their business to disruption. On the flip side, for those that embrace innovation there is an opportunity to grow their business by 20%.

Our goal is to ensure our strategic investors are on the right side of this equation.

Insurtech represents a unique opportunity for insurers to evolve their business model. Insurtech is not necessarily about disruption, but more an opportunity to take advantage of technology and data to create innovative solutions, reduce costs and capture greater value for customers, brokers and intermediaries, underwriters and service providers.

At one level, active participation is required just to meet the basic requirements of playing in the new market. For those committed to a strategic approach, insurtech can help drive true competitive differentiation, while enabling measured bets for the future.

See also: Insurtech: Unstoppable Momentum  

Underpinning this transformation are 10 key trends that we have identified and believe will be at the heart of the insurtech evolution:

  1. Insurance, as we have it known it historically, will be bought, sold, underwritten and serviced in a fundamentally different way within the next three years
  2. External data and contextual information will become increasingly more important than historical internal data for predicting risk and pricing
  3. A majority of the simple covers will be bought in standard units through a marketplace/ exchange, permitting just-in-time, need and exposure based protection through mobile access
  4. Solutions will continue to evolve from protection to behavioral change then to prevention — even across complex commercial insurance
  5. Although proliferation of data and increasing transparency on the buyer and seller will cause disintermediation for simple covers, it will also create opportunities for brokers and intermediaries to innovate solutions and channels for their B2C (non-standard risk pools, retirees/older generation, healthcare gaps) and B2B (emerging and unknown risks, cyber, global supply chains, cross-border liability, terrorism) customers
  6. The ability to dynamically innovate (new risk pools, new segments, new channels) and deliver on the customer promise will become the most important competitive advantage (as known risks continue to get commoditized and move to the direct channels)
  7. Internal innovation, incubation and maturing of capabilities will no longer be the optimal option; dynamic innovation will require aggressive external partnerships and acquisitions
  8. Simple “Grow or Go” decisions of the last decade will be sub-optimal, as the dust settles in insurtech; building in future optionality and degrees of freedom will be the key
  9. Consolidation just for economies of scale will provide increasingly less marginal value in non-life as well as life insurance; real value creation will come from “economies of skill” and digital capabilities
  10. Deep learning (next generation of AI), blockchain and genomics technologies will improve financial inclusion and better meet the needs of the under-insured and uninsured

We have linked the above trends to analysis of how profit pools will change over time to build an investment strategy that also focuses on platforms or clusters that allow us to build more compelling propositions by connecting related players in adjacent parts of the value chain.

Three areas of initial focus are:

1. A digital front office solution that leverages an open architecture platform developed by Convista (OneDigitalOffice), augmented by relevant startups including, for example, on-demand insurance by Oula.la and social media adoption by Digital Fineprint.

The ability to drive dynamic innovation is driven by technology stack/system flexibility to respond quickly to customer needs. New risk pools, new products and new ways to reach customers will place massive pressure on traditional systems, making a dynamic digital front office key to execution.

  • 360-degree multi-channel (direct, field sales force, internal sales force, independent agents/brokers) connectivity
  • Augmented functionality across the value chain from sales/distribution through underwriting, binding and servicing
  • Sales funnel optimizer (sales force effectiveness) — inquiry/quote, quote-to-submission, submission-to-bind ratio
  • Sales force/intermediary (broker/agent) segmentation and performance management

As an example, the impact of the sharing economy and need for on-demand insurance will require instant pricing and cover that switches on and off at point of sale to meet the needs of the customer.

2. An end-to-end claims solution developed by RightIndem and supported by additional capability from other technology providers

The claims space is an interesting one; it represents the largest individual expense on any P&C insurer’s P&L but conversely has seen very little innovation. This is now starting to change. RightIndem has developed a platform that achieves significant improvements in customer satisfaction while significantly reducing the cost of managing the claim. This is a win/win for the customer and the insurer and in our view a classic enabler technology that takes an existing function within the insurance value chain but does it much more effectively and with the interests of the customer at its core.

See also: Insurtech Checklist: 10 Differentiators  

3. Artificial intelligence (AI) with an initial focus on life and health insurance developed by Gen.Life

We are particularly excited about the combination of AI and the latest health technology to transform insurance. Examples include Livingo Health, which combines a blood glucose monitor support and intervention to help coach people through diabetes, and Cycardia Health, which employs machine learning predictive analytics software to categorize abnormal circadian patterns in otherwise healthy breast tissue to provide early detection of breast cancer. These types of technology will allow the early detection of potential diseases so that preventative treatment can be started much earlier, dramatically improving chances of success. Rather than life and health insurance being about prospective payments after an event, they can become the key mechanism for deploying technology to allow people to enjoy healthy lives.

The insurance industry will look very different in five years, but more importantly there is an opportunity to drive huge benefits to society through reducing under-insurance and supporting the transition from protection to prevention.

FinTech: Epicenter of Disruption (Part 3)

This is the third in a four-part series. The first article is here. The second is here.

Typically, disruption hits a tipping point at which just less than
50% of the incumbent revenue is lost in about a five-year timeframe. Recent disruptions that provide valuable insight include streaming video’s impact on the video rental market. When broadband in the home reached ubiquity and video compression technology matured, low-cost streaming devices were developed and, within four years, the video rental business was completely transformed. The same pattern can be seen in the Internet-direct insurance model for car insurance. At present, 50% of the revenue from the traditional agent-based distribution model has been moved to direct insurance providers.

Revenue at risk will exceed 20% by 2020

According to our survey, the vast majority (83%) of respondents from traditional financial institutions (FIs) believe that part of their business is at risk of being lost to standalone FinTech companies; that figure reaches 95% in the case of banks. In addition, incumbents believe 23% of their business could be at risk because of the further development of FinTech, though FinTech companies anticipate they may be able to acquire 33% of the incumbents’ business. In this regard, the banking and payments industries are feeling more pressure from FinTech companies. Fund transfer and payments industry respondents believe they could lose as much as 28% of their market share, while bankers estimate that banks are likely to lose 24%.

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A rebalancing of power

FinTech companies are not just bringing concrete solutions
to a morphing consumer base, they are also empowering customers by providing new services that can be delivered with the use of technological applications. The rise of “digital finance” allows consumers to connect to information anywhere at any time, and digital services can address their needs in a more convenient way than traditional nine-to-five financial advisers can.

According to our survey, two-thirds (67%) of the companies ranked pressure on margins as the top FinTech-related threat. One of the key ways FinTechs support the margin pressure point through innovation is step function improvements in operating costs. For instance, the movement to cloud-based platforms not only decreases up-front costs but also reduces continuing infrastructure costs. This may stem from two main scenarios. First, standalone FinTech companies might snatch business opportunities from incumbents, such as when business-to-consumer (B2C) FinTech companies sell their products and services directly to customers and position themselves as more dynamic and agile alternatives to traditional players. Secondly, business-to-business (B2B) FinTech companies might empower specific incumbents through strategic partnerships with the intent to provide better services.

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FinTech, a source of opportunities

FinTech also offers myriad possibilities for the financial services (FS) industry. B2B FinTech companies create real opportunities for incumbents to improve their traditional offerings. For example, white label robo-advisers can improve the customer experience of an independent financial adviser by providing software that helps clients better navigate the investment world. In the insurance industry, a telematics technology provider can help insurers track risks and driving habits and can provide additional services such as pay-as-you-go solutions.

Partnerships with FinTech companies could increase the efficiency of incumbent businesses. Indeed, a large majority of respondents (73%) rated cost reduction as the main opportunity related to the rise of FinTech. In this regard, incumbents could simplify and rationalize their core processes, services and products and, consequently, reduce inefficiencies in their operations.

But FinTech is not just about cutting costs. Incumbents partnering with FinTech companies could deliver a differentiated offering, improve customer retention and bring in additional revenues. In this regard, 74% of fund transfer and payment institutions consider additional revenues to be an opportunity coming from FinTech. This is already true in the payments industry, where FinTech generates additional revenues through faster and easier payments and digital wallet transactions.

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This post was co-written by: John Shipman, Dean Nicolacakis, Manoj Kashyap and Steve Davies.

Gallup

A Wake-Up Call for B2B Brands

Gallup has just released the Guide to Customer Centricity: Analytics and Advice for B2B Leaders. The study reports that 71% of B2B clients are ready and willing to take their business elsewhere – not even one-third are fully engaged in their relationships with suppliers.

If you are operating in the B2B world – and you likely are, as either a supplier or client – do you find this statistic surprising?

This finding should be a wake-up call for B2B brands to figure out what is going on with their clients.

Do you know anyone in the business world who will say they are opposed to client-centricity? Putting clients at the center of a business remains an aspiration for many companies. Why is a strategy of such potential value so difficult to execute? What must happen to create mutually beneficial relationships between businesses and clients?

Companies have to get out of their own way and provide the value that clients expect. B2B or B2C, people handing over their money to you because they believe you are meeting their needs demand personalized engagement. They will choose the right moment to go elsewhere if you fail to deliver. Here are some areas that can make a difference:

  • Sales force compensation systems rewarding new client deals, with little incentive past contract signing and getting the client set up, can be updated to reward surfacing and delivering on continuing needs.
  • A linear approach to winning, welcoming and engaging clients can be reinvented to treat clients like people and break old habits of putting them through a gauntlet of internal systems and silos.
  • An outside/in understanding of client needs and wants can replace product pushing. Even traditional client needs assessments may not capture evolving needs – these methods tend to play back answers biased by the products driving today’s P&L.

There is no magic to this. Client-centricity requires change and a new mindset. It’s hard work. Where can you begin? Follow these four action steps to identify the priorities for your business:

  • Go out and talk to clients. The value of conversations where clients do most of the talking and you do most of the listening can be far higher than quantitative research.
  • Segment your client base. This is not just about bucketing clients by size, sector, potential value to you or historical purchase relationship. It’s about the clients’ journeys, including their attitudes and behavior, how they go about achieving their vision of success, and where you fit in.
  • Reimagine your clients’ experience of doing business with you. How does your brand enhance the clients’ journey — it’s not about making them fit in to your mechanisms for running your business. It’s about reflecting their preferences back to them in every interaction they have with you.
  • Figure out what this means for your employee experience and expectations. Everything from sales incentives, to marketing communications, to servicing policies to channel capabilities – should contribute to the experience your brand will create so your clients see you as enabling their vision for their business. Hire people who are not only business-focused but people-focused.

The very term “B2B” fails to acknowledge the reality that every brand, irrespective of whether its audience includes individuals or enterprises, must prove itself to the people who will be its users, buyers or payers. Behind every B2B relationship are P2Ps – People-to-People.

This post also appears in Amy’s regular column on Huffington Post.

Seriously? Artificial Intelligence?

I don’t know about you, but when I think of artificial intelligence, I think Steven Spielberg and Arnold. That was until I saw a solution offered by Conversica, a Salesforce partner.

AI is here, it’s happening now and it’s a lot more pervasive than you think. The rise of “robo advisers” in financial services, Ikea’s “Anna” customer service rep and Alaska Airline’s “Jenn” all point to the growing adoption of technology that personalizes customer experiences….at scale.

One of the 5 D’s of Disruption in insurance is “Dialogue.” And AI is driving it.

Today, in insurance, AI is used to create natural dialogue with customers, nurture those leads, prioritize them for agents and follow through as needed. Conversica, for example, gets smarter as it interacts more with customers. And, yes, it has passed the Turing test.

It is particularly well-suited for B2C because the volume of interactions with prospects can be overwhelming for insurance agents. As insurers embrace omni-channel, new prospects can be created from any source, whether it be a contact center, social media or a face-to-face meeting. Not only is lead volume increasing, but it takes as many as six before an agent can get a prospect on the phone. This becomes a time and energy suck for agents; he is unable to follow through on every lead, and the quality of interactions goes down.

So how are insurers and agents responding? In this webinar, Eric (Conversica) and Alex (Spring Venture Group) explain to me how AI is used to nurture and convert leads.

My takeaway: AI is not just a science project. It works. It’ll become more invisible to consumers. And it creates real value to both customers and employees.

As Marc Benioff, CEO of Salesforce, said recently in Fortune magazine, “We’re in an AI spring. I think for every company, the revolution in data science will fundamentally change how we run our business because we’re going to have computers aiding us in how we’re interacting with our customers.”