According to industry estimates, the small-business insurancemarket (those businesses with 50 or fewer employees) representsroughly $95 billion in potential premium—a huge lure for producers.In a traditional agency, however, an agent's sales process is bothlengthy and costly: There are limited human and financial resourcesfor relationship-building, account-selling and customer-retentionefforts.

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

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

The survey revealed that small-business owners have a strongneed for price transparency, accessible language and timeefficiency in the discovery process. If the search for the rightinsurance solution takes too long or proves too complicated,small-business owners said, they would defer to a traditionalindependent agent.

Small-business owners also said they want agents to be moreproactive and intuitive and to anticipate their needs as theirbusinesses evolve. Data segmentation would be helpful in thisregard, allowing producers to utilize client data to identify andtarget customers by policy-issue dates, geographic locations ordemographic data.

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

POTENTIAL PORTAL SOLUTIONS

Administrative tasks have become an obvious and significantproblem in the long sales cycle. Telephone tag and emails back andforth can create a logjam in the communication process between theagent and carrier underwriters, and filling out multiple carrierforms can create a mountain of paperwork. These activities caneasily consume five to seven days of an agent's sales cycle beforea policy is issued.

Today's automation technology, however, offers the opportunityto shorten the agent's sales cycle. Key capabilities requiredinclude centralization of the client's data in a secure onlineenvironment so everyone in the value chain can access theinformation, along with the creation of a platform that enablesreal-time collaboration and communication between clients, agentsand carriers. A similar technology model exists in thetravel-agency sector through portals like Expedia andTravelocity.

The portal solution used by BOLT, for example, functions muchthe same way as the travel portals and offers similar benefits tosmall-business owners who want to purchase a commercial insurancepolicy as quickly and easily as they can book a flight to Wichita.In a user-friendly, online environment, a small-business consumercan access up to six quotes from multiple carriers in a fewminutes, allowing clients the chance to research, review andcompare 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 alist of risk factors that make them poor candidates for standardlines. While others may opt for a different approach than what BOLThas employed, the portal should be able to provide agents access toall the information and resources necessary to issue a policy inless than an hour in most cases.

This need for speed is particularly important in serving anemerging niche within the small-business market: independentcontractors and consultants, which present strong salesopportunities for agents and brokers. These one-person operationsoften need immediate commercial insurance coverage in order tosecure a contract or win business. For these clients, confirminginsurance coverage within an hour is an urgent businessrequirement, not a safety measure.

Small-business market requirements for finding the rightcommercial insurance solution translate to a simple, time-efficientsearch process where pricing is transparent and information is easyto understand. A dramatic reduction in the sales cycle would allowagents the time they need to build relationships, advise clientsand explore new sales leads—all necessary activities for clientretention and acquisition.

Technology platforms and portals that are now available presentintriguing opportunities in business and revenue growth for bothagencies and small businesses alike—and though the technology mightenable greater profitability, perhaps one of its biggest benefitsis that it allows agents, brokers and small-business owners tofocus on what they each do best.