Digital natives want more from their insurance agents, Semsee’s Small Business Snapshot shows
The market for small business insurance is evolving in many ways. With the number of small businesses on the rise, emerging risks are leading to new products and business models as owners adapt to the new normal. The bottom line—there are many opportunities for new small commercial sales.
Younger business owners are a critical segment for agents looking to grow small commercial. This is especially true as agents plan three to five years out and the number of new business owners under 40 continues to increase.
But these younger business owners have vastly different expectations than older customers that agents are used to serving, according to a recent survey from leading automated small commercial quoting solution, Semsee. Millennial and Gen Z business owners require a significantly more high touch experience than Baby Boomers. Policy renewals are a good example: 81% of Millennial and Gen Z business owners want their agents to present new pricing and coverage options to them before their policies renew each year, compared to 63% of Baby Boomers.
While 67% of Baby Boomers (born between 1946-1964) want their agents to review coverage with them annually, Millennials and Gen Zs (born 1981 to present) are looking for more frequent engagement about their risks and coverage options. Nearly one quarter want to review coverage monthly, 24% want quarterly communications, and 29% want to connect with their agents twice a year.
Digital natives are used to having more information and service options at their fingertips which raises the bar when it comes to insurance for their businesses. Agents need to find innovative ways to meet their needs.
A critical need for more education on insurance policies
No one likes surprises when it comes to their insurance, yet unknowns about coverage are the norm for many, with 50% of Millennial and Gen Z business owners saying they’ve been surprised to find that something wasn’t covered by their policies that they expected to be. Only 21% of Baby Boomers say they’ve had the same experience. Business interruption, cyber risk, personal injury and water damage are some of the examples cited by survey respondents.
There is clearly room for driving greater understanding about what policies cover and what they don’t. Only 26% of Baby Boomers and 21% of Millennial and Gen Z business owners rate their understanding of their business insurance policies as excellent.
The good news is that business owners of all generations are happy with their agents—more than 70% rate their agents’ understanding of their needs as good or excellent. But there are gaps in knowledge and understanding, especially among younger owners. There’s a real need for agents to educate which can drive stronger bonds with their customers.
Technology can also play an important role, especially in serving younger business owners, enabling the agency to be more efficient at delivering quotes and proposals, offering options for self-service, and delivering relevant insurance education and content electronically.
About the Survey: Semsee’s Small Business Snapshot was conducted January 8 – 10, 2021 using SurveyMonkey’s online platform. Results are based on a total national sample of 605 self-identified small business owners of which 54% have insurance and purchase it through an agent. The sample included a total of 306 Baby Boomers (participants aged 57-74 years old) and 299 Millennials and Gen Zs (participants aged 18-38). A full report of the results is available here. This survey is part of a series designed to measure small business owner insurance preferences. Results of other surveys in the series are available here.