Small and medium-sized businesses are often willing to change their commercial insurance, according to the recently published McKinsey study “Commercial Insurance – The Great Opportunity”. Around a third of commercial customers are dissatisfied with their current insurance cover. In addition, many companies are underinsured.
At the same time, the commercial insurance market offers brokers and intermediaries great sales potential. According to the study, commercial business has grown by an average of around 3 percent annually in the past. Despite Corona, the consulting firm KPMG expects annual growth rates of around 2 percent for the coming years.
In addition, according to the McKinsey study, the unused market potential in relation to the annual premium amounts to up to 2 billion euros – and that only for underinsured small and micro companies. That would correspond to around a tenth of the current total premiums.
Risks of SMEs are very different
So there is some potential – just from the market volume. In addition, many companies, regardless of their business model, often do not have appropriate insurance. Or their insurance cover is several years old and has never been updated since then. There are a variety of risks lurking in every company that change over the course of business life. Some of these can be self-cushioned, but others require insurance. The exact risk analysis is therefore of central importance in the consultation. A very good opportunity for an ambitious insurance broker who wants to open up the commercial sector.
At the same time, customers expect fast, simple and digital offers for their commercial insurance cover, just as they are used to from their private lives. Some companies want a fully digital service, while others don’t. Depending on preference, the customer should be addressed and accompanied online or offline. On the part of insurers and sales, this means versatility to respond to different needs.
Furthermore, the customer wants products that are individual and flexible. The corona pandemic has also left its mark here. Small and young companies in particular have had to adapt their business models or have looked for other fields of activity. Mixed farms are the result. This also means changes for insurance cover. Insurers and their sales partners were and are asked to find appropriate solutions to new situations.
Loyal customers recommend brokers
How can brokers use this? The experts of the McKinsey study name concrete success factors to protect insurance customers well. This includes, for example, that the focus should not be on the one-off conclusion of a contract, but on long-term support. Loyal customers would boost new business through recommendations. The sale of commercial insurance can also be significantly improved by specializing in target groups. And another conclusion of the McKinsey survey: Insurers must also offer their products via third-party price comparison or underwriting software.
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