As many as half of small-business insurance consumers are opento the idea of buying at least one of their property and casualtycoverages directly from a carrier over the Internet, without havingan agent or broker shop for them or advise them, a new study byDeloitte has revealed.

Direct sales of personal auto insurance over the Web has been aviable distribution platform for a number of years, keeping theheat on agents and brokers to demonstrate their added value if theywant to retain, let alone expand their market share.

However, Deloitte's research indicates that a day of reckoningfor intermediaries — as well as for those insurers who depend onthem exclusively to distribute their products — might similarly belooming sooner rather than later in the small-commercial market, ascarriers begin to seriously explore the potential for reachingbuyers via a one-stop, Web- or mobile-based transaction.

It would be understandable if many are skeptical about thepotential for disintermediation in reaching small-businesscustomers, if only because it simply hasn't yet been widelyattempted here in the United States, beyond a few lines ofcoverage.

Indeed, the conventional wisdom is that small-business consumersprobably don't have time to shop for coverage on their own — andeven if they do, their lack of an insurance background, thecomplexity of coverage, as well as their service requirements wouldlikely keep them solidly entrenched in the agency camp for theforeseeable future.

However, our hypothesis is that given the growing proclivity ofindividuals to live their personal and business lives online, manybuyers of small-business insurance might indeed be ready, willingand able to conclude a transaction on their own, whether throughtheir desktop, laptop, tablet or perhaps even their smartphone.

We tested that hypothesis in two primary research projectsconducted by Deloitte's Center for Financial Services. The firstwas a pair of focus groups convened over the summer of 2012. Wethen followed-up with a much broader online survey this past March,conducted on Deloitte's behalf by Exevo, a research organizationspecializing in this segment. The survey queried 751 respondentsmaking purchase decisions for companies representing a wide arrayof industry groups and different-size firms.

We asked a variety of questions designed to determine theappetite for making a direct purchase of small-business insurance,including:

• Had the respondents ever shopped for commercial insuranceonline, and if so, what did they think of the experience?
• How likely might they be to buy such coverage direct from acarrier over the Web without a personal agent to guide them?
• Which, if any, conditions might convince them to conclude atransaction over the Web, with or without the assistance of someonein a licensed service center?
• What factors might discourage them from buying directonline?

The survey found that while the direct purchase of commercialcoverage might not be attractive for all small-business insurancebuyers — anymore than it is for those buying personal lines today —a significant segment appears to be very eager to take the plungeand buy direct, while many others are at least keeping an open mindabout the option.

The survey identified three categories of respondents,including:

• “Eager Beavers” — representing anywhere from 10-20 percent ofthose surveyed, depending on the line of business — who say theywould be “very likely” to conclude a transaction without their ownagent. Many of these respondents are already shopping for smallcommercial coverage over the Web.
• “Fence-sitters” — those who say they would be “somewhat likely”to buy direct over the Web, depending on the circumstances,representing about one-third of respondents.
• “Naysayers” — representing about half of the respondents, whosay they are “not very likely” to buy without an agent, but may beopen to buying direct if certain reservations, such as trustissues, are overcome.

Over the course of the summer, I'll share with you some of thesurvey's key takeaways, offer suggestions on factors to considerfor insurers thinking of implementing a direct distribution model,and discuss lessons that can be learned from those selling directthat could help carriers which decide not to use thatplatform.

In the meantime, you can download Deloitte's “Voiceof the Small-Business Consumer” report by clicking here.