With more Gen Xers and millennials searching for business insurance quotes, they will turn to the Internet or other digital applications—rather than picking up the phone or visiting an agent’s office. So says John Swigart, co-founder and CEO of Pie Insurance, in an interview with the team at Carrier Management.
To adequately serve this younger, more technologically savvy market, insurance companies will need to overcome three frustrations that small businesses (SMBs) encounter, according to Swigart:
- Insurance purchasing is constrained to traditional business hours: The traditional 9 to 5 operations of insurers and agents are a pain point for business owners who are used to online pricing and buying experiences. Insurance providers and agents need to give customers options to access what they need—when they need it.
- Lack of transparency about insurance: The traditional insurance purchasing process often requires financial literacy and knowledge of insider buzzwords and confusing terms. To improve the experience for purchasers, insurers need to offer jargon-free information about their products that makes it clear to SMBs exactly what they are purchasing, including how this insurance benefits them and their employees.
- Higher prices due to more general pricing models: Pie Insurance’s data indicates that 80% of small businesses overpay for workers’ comp by up to 30%. In some cases, insurers overlook SMBs and deny them the option of workers’ comp coverage because they’re considered too small. Insurtechs that aren’t bound to the antiquated sales models have an opportunity to better serve both small business owners and their insurance agents.
What’s the solution to these hurdles? According to Swigart, it begins with a custom, segmented pricing model for small businesses. Pie’s use of predictive analytics allows the company to gain insight into workers’ comp-specific claims and premiums for better pricing (particularly in niche markets like construction, plumbing, or retail). Providing flexible billing also is important. Customers should be able to pay as they go using credit cards rather than paying a large annual upfront fee.
Pie Insurance is solving these customer frustrations (by leveraging advanced analytics and technology) to work with insurance agents and small businesses—on their terms.
Read the full Carrier Management article.
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