SMA identified five prevalent distribution strategies that are currently deployed by insurers. A synopsis of these strategies follows, along with recommendations for insurers.

Existing agent channels … enhanced with tech: Many insurers are doubling down on their independent agent distribution channel. Agents, after all, still sell the lion's share of the small commercial business. However, in this digital age, insurers must be aggressive in the tech capabilities they provide to agents, with modern portals, mobile capabilities, enhanced agent-carrier connectivity solutions, and more.
Direct digital: The direct model, successfully deployed for years in the personal lines space, is moving to small commercial. Small business owners are more tech-savvy, and some want self-service capabilities to identify the coverages they need, get quotes, and finalize their policy — all online.
New digital brand: Some insurers are establishing new digital brands for small commercial distribution. In most cases, the underwriting and back-office support remain with the insurer, but the front-end marketing and sales are done via a newly established, visible brand in the market. This allows insurers to distinguish the channel from their agent channel and go after different segments in new ways.
Partnering with InsurTech: An appealing option to many insurers is to partner with InsurTechs that are capturing attention with their focus on the customer experience. These InsurTechs may be digital agents/MGAs or comparative raters. Many InsurTechs offer agent-focused solutions or enhance the agent/carrier relationship and support the approach in #1 (above).
Establishing a marketplace: Several very large insurers are establishing their own marketplaces that support either agent or direct submissions. These marketplaces typically provide automated appetite matching, triage, and recommendations on coverage. In addition to traditional small commercial players, such as Chubb and The Hartford, large personal lines companies like Progressive and Nationwide are also going after small commercial business with this approach.

Which of these approaches will turn out to be the most successful in growing a small commercial book? Of course, there isn't one definitive answer. The likelihood is that a combination of approaches will yield the best results for each specific carrier. The omnichannel world has come to small commercial, which means that most insurers will utilize at least two of these methods of reaching customers.

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What's the best approach to the small commercial market?

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