Meeting the risk management needs of today’s small businesses requires the same ingenuity and sophistication that carriers tend to offer to large organizations.
Insurance agencies and small businesses alike are facing a transition period in contact.
Long gone are the days of picking up the phone or popping something in the mail to keep business flowing. The world of texting and email today is all about brevity and efficiency.
In small business insurance, the winners will be those who “not only digitize existing services, but use digital engagement to deliver value in new ways.” Jeff Duncan, President of Business Lines, Real Estate Liability at AmTrust Financial Services.
“More and more customers expect to not only communicate with their insurance companies digitally, but digital channels can provide them with additional value beyond simply calling for an automatic ID or using an app to report a claim,” Duncan said.
A similar dynamic is required in the relationship between carriers and agencies. Today’s brokers and agents need to quickly identify carriers that can offer the robust coverage their small business customers need.
From launching API integration for seamless quoting and binding interactions with agencies to offering a robust electronic insurance solution for small businesses, AmTrust Financial Services has invested in resources to help small businesses anticipate threats and develop their own risk management strategies.
“The future is not in reactive protection,” Duncan said.
There are six ways small business insurance companies can ensure that they avoid rejecting the needs of today’s small business.
Provide flexible solutions to serve policy
Meeting the insurance needs of small businesses begins with understanding the requirements of agents and brokers.
Duncan explained that there is a common business model in the insurance industry among large carriers that rely on agents who use service centers operated by those companies to manage their renewal book.
“One of our hypotheses is that service centers are often utilities for poor technology, especially at a time when some carriers are pursuing direct-to-consumer models,” he said. “Agents will increasingly be interested in the service center model, who they allow their customers to manage their customers, and how they allow that management to take place.”
Given this trend, AmTrust is taking a flexible approach to serving policy.
By using APIs and microservices, AmTrust has focused on providing a low-cost and cost-effective mechanism for agents to build their customer experience for their customers.
Duncan said this allows agents to fully engage with AmTrust on their own terms rather than forcing them to experience the customer and the carrier-created process. “However, we know that some agencies value the service center model, and we are exploring ways to meet this need,” he added.
Anticipate Small Business Needs
For Duncan, delivering value to customers begins by looking at how customers interact with the company, and then thinking, “What is the need behind this demand?”
“We are investing in both technology and product innovation to not only meet the needs of small businesses today, but to anticipate and pursue needs that continue to change in the future,” he said.
As a well-known provider of workers compensation insurance, AmTrust aims to expand its well-known reach as a comprehensive insurance solutions provider for small businesses — and in a comprehensive manner, Duncan said.
An important part of knowing what small businesses need is understanding the problems they face. Regulatory risk in workplace safety and cybersecurity is Duncan’s top priority.
“For the past two and a half years in the COVID-19 experience, we’ve seen companies caught between sometimes conflicting state and federal rules about, for example, vaccination and mask requirements.”
“Small companies are trying to run a company, and they don’t have a lot of time or resources dedicated to managing a highly volatile regulatory environment.”
“Another example is cyber security,” he continued. “As states and the federal government begin to impose obligations on companies regarding how they retain customer data, or how secure their websites and other portals are, not only is it a good idea to have a highly secure portal or to trust your data retention capabilities, but now there are regulatory risks, including So potential financial penalties for failing to do so.”
Cyber health care
AmTrust offers cyber insurance for major events, but sometimes it’s about helping insured manage cyber security cleanliness first.
“Where I believe the future lies not just in reactive protection, but in using technology to anticipate areas of risk in small businesses, in agencies, digital assets or IT infrastructure, so long before a phishing attack occurs, I have identified the ways in which it is most likely to happen.”
“Long before a denial of service attack happened, you identified the weaknesses in your architecture and ideally started to address them.”
One of the ways AmTrust develops its portfolio of products beyond insurance coverage is to better enable small businesses to better evaluate their websites and systems and proactively protect themselves.
“Insurance is inherently a reactive product, but it doesn’t have to be,” Duncan said. “Just as we engage in loss control for workers compensation and help small businesses better understand how to protect their employees so they avoid claims in the first place, we are looking at ways to do something very similar from a cyber risk perspective.”
Bypass reputational risk
Managing their online reputation is a top priority for many small business operators. With candid clients who go to the web to share Duncan noted that with their experiences with products and services of all kinds, companies now face significant reputational risks.
“Great small businesses as well as big agencies will not only do that [hope] For quality engagement on review sites, but actively striving to grow the image they want through these review sites.
And that means getting involved with them, too. When someone has a bad experience in your business, and this will inevitably happen in the best companies, how you interact with them … and most importantly, how you interact with them on the review site can turn this into a powerful catalyst for the brand, or vice versa, it can harm your brand commercial”.
Develop a better employee experience
Employment shortages, wage growth, and wage inflation cause many small businesses to look closely at the employee experience they provide. Organizations of all sizes look to enhance opportunities for one-to-one contact and cultivate a high-quality employee experience.
“In an environment of massive labor shortages that leads to wage growth, wage inflation, and a truly competitive labor market,” Duncan said, “the best wage employers will not only think in isolation — although that is an important part.” — but about the employee’s experience in general.”
“While very large organizations have the resources to invest heavily in employee experience, it is likely that smaller companies will not have the same level of resources, but they do have one-on-one contact with their employees,” he said.
AmTrust positions itself to provide small businesses with insight into growing improved employee experiences along with cultivating high-quality customer experiences.
“One way to retain your employees over the long term, which is a way to attract and retain them, is to make your workplace more attractive to be in,” Duncan said. Ultimately, this translates to customer experiences.
Provide the service at hand
As smooth as digital engagement with agencies that handle small business insurance can become, there will be times when the situation is specific enough to make a phone call. And carriers that work with small businesses should be able to get someone on the phone to help an agency remove roadblocks to coverage for their customers.
“Because we are so focused on the small business space, and because we are a relatively small and flat company, our agents have a high degree of access to all levels of the organization,” Duncan said.
“There are a lot of small agencies out there and someone goes out and sticks a shingle on a storefront and tries to make their way in the world,” he said. “We are barely 25 years old and we can sympathize with this entrepreneurial spirit.” &