Filed Under:Agent Broker, Commercial Business

Underserved and Underinsured: Tapping the Small-Business Market

According to industry estimates, the small-business insurance market (those businesses with 50 or fewer employees) represents roughly $95 billion in potential premium—a huge lure for producers. In a traditional agency, however, an agent’s sales process is both lengthy and costly: There are limited human and financial resources for relationship-building, account-selling and customer-retention efforts. 

When factoring in the investment of time and effort required, agents simply aren’t able to make enough money in the small-commercial arena—and as a result, this market has been largely untapped, and small businesses remain underserved and underinsured. 

In 2009, SeaPass Solutions, a company that delivers automation solutions to the insurance marketplace, conducted a survey of 125 small-business owners to find out how effectively the insurance needs of this group were being served. The goal: to better understand how both business-process improvement and technology automation could help agencies and brokers turn a profit in the small-business market. 

The survey revealed that small-business owners have a strong need for price transparency, accessible language and time efficiency in the discovery process. If the search for the right insurance solution takes too long or proves too complicated, small-business owners said, they would defer to a traditional independent agent. 

Small-business owners also said they want agents to be more proactive and intuitive and to anticipate their needs as their businesses evolve. Data segmentation would be helpful in this regard, allowing producers to utilize client data to identify and target customers by policy-issue dates, geographic locations or demographic data. 

In response, SeaPass founded BOLT (Business Owners Liability Team) in 2010—a national agency using an online brokerage model targeted exclusively at the small-commercial-business marketplace. Others looking to expand their market share within the small-business community may also benefit from the SeaPass research findings and best practices BOLT has implemented.



Administrative tasks have become an obvious and significant problem in the long sales cycle. Telephone tag and emails back and forth can create a logjam in the communication process between the agent and carrier underwriters, and filling out multiple carrier forms can create a mountain of paperwork. These activities can easily consume five to seven days of an agent’s sales cycle before a policy is issued.

Today’s automation technology, however, offers the opportunity to shorten the agent’s sales cycle. Key capabilities required include centralization of the client’s data in a secure online environment so everyone in the value chain can access the information, along with the creation of a platform that enables real-time collaboration and communication between clients, agents and carriers. A similar technology model exists in the travel-agency sector through portals like Expedia and Travelocity. 

The portal solution used by BOLT, for example, functions much the same way as the travel portals and offers similar benefits to small-business owners who want to purchase a commercial insurance policy as quickly and easily as they can book a flight to Wichita. In a user-friendly, online environment, a small-business consumer can access up to six quotes from multiple carriers in a few minutes, allowing clients the chance to research, review and compare the information before making a selection. 

Clients also have access to more complex lines like Excess & Surplus—a big advantage for small businesses with unique needs or a list of risk factors that make them poor candidates for standard lines. While others may opt for a different approach than what BOLT has employed, the portal should be able to provide agents access to all the information and resources necessary to issue a policy in less than an hour in most cases. 

This need for speed is particularly important in serving an emerging niche within the small-business market: independent contractors and consultants, which present strong sales opportunities for agents and brokers. These one-person operations often need immediate commercial insurance coverage in order to secure a contract or win business. For these clients, confirming insurance coverage within an hour is an urgent business requirement, not a safety measure. 

Small-business market requirements for finding the right commercial insurance solution translate to a simple, time-efficient search process where pricing is transparent and information is easy to understand. A dramatic reduction in the sales cycle would allow agents the time they need to build relationships, advise clients and explore new sales leads—all necessary activities for client retention and acquisition. 

Technology platforms and portals that are now available present intriguing opportunities in business and revenue growth for both agencies and small businesses alike—and though the technology might enable greater profitability, perhaps one of its biggest benefits is that it allows agents, brokers and small-business owners to focus on what they each do best.

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