Commercial Lines Insurers Cannot Afford to Stand Idle in Today’s Channel Environment

According to a recent SMA survey of executives, ninety-one percent of small commercial lines insurers and 82% of mid/large commercial lines insurers have plans to expand their channel partnerships. When you consider the evolving distribution landscape, including increased consolidation, new entrants, and more sophisticated technology, it is no surprise that carriers are exploring different channels that will allow them to reach and service customers effectively.

How commercial lines carriers address channel expansion is influenced by several factors, such as growth plans, target markets/segments, and other strategic initiatives. In both small and mid/large commercial lines, there is more focus on InsurTech/digital agents than a year ago, with 61% and 68% of each segment, respectively, expanding or adding the channel. Many insurers now view InsurTech digital agencies as just another independent agency option, while others see opportunities with the technologies offered by these firms.

Among carriers’ expansion plans emerges a new trend, particularly in the mid/large commercial segment – increased interest in direct models. More than 30% of carriers report plans to add direct business via call center/web, and 21% say they plan to add web/mobile direct business. As technology has evolved, mid/large commercial lines carriers have found new abilities to provide policyholder service and reach new customers directly, bucking the historical trend that deemed the risks too complex.

The fierce activity across commercial lines to expand channel options proves that complacency is not an option for insurers seeking to remain competitive. The various options available in the market today present new opportunities for carriers to be strategic about aligning their channel plans with their targeted industries and product segments while also not undermining the importance of long-standing partnerships.

For more information on commercial lines distribution expansion strategies, see our recent research report, Channel Strategies for P&C Small and Mid/Large Commercial Lines: Plans for 2023 and Beyond. This report 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 large footprint of distribution clients.

Contact the author for more information on this new research and advisory services for distribution

About The Author

Mark Breading is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward-thinking strategies for success in the digital age. His inventive methodologies, fresh ideas, creative conceptualizations, and ability to incorporate InsurTech and transformational tech in business strategies are unparalleled. He also leads SMA’s research program, publishing 25-30 research reports per year and conducting various custom research projects for insurer and vendor clients. His thought leadership in the areas of InsurTech, transformational technologies, customer experience, and digital strategies has earned him a ranking of one of the “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the ten finalists for the “Top Global IoT in Insurance Influencer Award.”

Before joining SMA in 2009, Mark spent 25 years with IBM in roles including the Global Insurance Strategist and Director of Global Financial Services Executive Conferences in addition to leadership roles in consulting and marketing. Mark co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.

About SMA, a ReSource Pro company

At Strategy Meets Action, our clients advance their strategic initiatives and accelerate their transformational journeys by leveraging our forward-thinking insights, deep vendor knowledge, and vast industry expertise. Strategy Meets Action is an advisory firm that works exclusively with insurers, MGAs, and vendors in the P&C market. For more information, visit www.strategymeetsaction.com.

About ReSource Pro

ReSource Pro brings integrated operational solutions to insurance organizations to improve growth, profitability and insurance outcomes. Headquartered in New York, ReSource Pro’s global service centers address client operational needs around the clock. Recognized as an industry thought leader and listed as one of Inc. 5000 Fastest Growing Private Companies annually since 2009, the company is renowned for its focus on innovation, service excellence and trusted partnerships, and its unique productivity platform for insurance operations. More than 5,000 ReSource Pro employees provide dedicated support to hundreds of insurance organizations, consistently achieving a +97% client retention rate over a decade. For more information, visit www.resourcepro.com.

SOURCE: Strategy Meets Action (SMA)