Here are six ways continuous underwriting is helping insurers enhance their services to small-business clients as well as reinforcing their efforts to maintain and strengthen these valued relationships.

Eliminating surprises at intake and renewal for the insurer, insured and agent. Many small businesses are dynamic enterprises. They can make rapid and dramatic adjustments to their operations, often with a significant impact on their overall underwriting classification. Whether at initial intake or renewal, misclassifying a small business can be costly for an insurer and negatively impact its relationship with the agent and insured. While changes to the insured might appear subtle, they may be material from an underwriting perspective. For example, a restaurant may start a delivery service or a café might begin serving wine. Both scenarios not only involve the creation of new exposures but result in different risk classifications. Similarly, a small manufacturer might begin producing a new line or acquire different production equipment that results in a different risk classification. By leveraging alternative and emerging data sources, insurers and agents can stay on top of these developments, classify businesses accurately, and avoid unfortunate and potentially costly surprises.
Uncovering insurance cross-selling opportunities and risk management needs. By promptly spotting material changes in an insured's business practices, the process of continuous underwriting can give insurers and agents the ability to meet the emerging needs of insureds for enhanced protection by offering additional coverages that address new risks. Cafés that offer wine will need liquor liability coverage; restaurants that start delivery services may need to revisit their automobile liability insurance or add it to their program. The factory with a new product line may need product liability insurance and different machinery may create a new class of workers that affects the employer's workers' compensation program. All of these coverages can be presented to insureds within the policy period as these new or heightened exposures occur, improving service delivery along with customer satisfaction.
Flagging business activities that may lead to potentially uninsured exposures. As small enterprises evolve, their commercial activities can quickly lead to new and emerging exposures for which their coverage is inadequate or even missing entirely. The expanded use of the internet for business transactions can lead to potentially substantial cyber exposures and more robust social media activity may trigger media liability among other exposures. Meanwhile, rapid business expansion and revenue growth may result in inadequate liability limits. The ability of insurers and agents to flag these exposures as they develop equips them to be proactive about making sure small business clients recognize when they may need to reassess their programs prior to their annual program renewals.
Improving overall customer satisfaction and retention. The ability of insurers to access a wealth of new and alternative data sources and use algorithms and AI to drive a continuous underwriting process enables them and their agents to monitor individual small commercial accounts efficiently. It also puts them in a position to be proactive in making timely and appropriate recommendations to an insured client for critical program and coverage adjustments. Ultimately, as their insurers and agents are able to alert them of their evolving risks, small-business owners and managers will gain a better understanding of how changes to their operations may affect their exposures and insurance programs. This may help facilitate a more open and productive dialogue between insureds and their agents and insurers, and foster a greater appreciation among small businesses for the value of these relationships.
Providing value-added insights for agents and insureds. Insights gleaned about individual insureds from real-time access to qualified new data sources can give insurance companies and agents a dynamic perspective on these businesses and their risk profiles that transcends the relatively static and limited information typically provided on a standard policy application form. Armed with this expanded knowledge, insurers and agents are in a position to bring greater value to their small-business relationships, both in terms of providing the right coverage with appropriate terms and conditions and in anticipating emerging needs. When applied to entire classes of business, these factors can translate into improved productivity, better loss ratios and overall performance.
Identifying emerging coverage needs and speeding new product/solution development. While leveraging new data sources and technology to drive continuous underwriting can significantly enhance the ability of insurers and agents to serve individual small commercial accounts, this capability also has potentially more widespread application. When applied across groups of clients in the same business classification, for instance, it may help identify emerging exposures and coverage needs. When existing policies don't adequately address these new risks, insurers may uncover opportunities to drive innovation and create new solutions.

Although the commercial insurance industry has only recently begun applying continuous underwriting to small-commercial accounts, insurers, agents and insureds are already starting to understand the significant potential benefits it can bring to their business. As these exciting new capabilities continue to gain traction, they will help elevate the insurance industry's relationships with small commercial accounts to new levels of excellence.

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Continuous underwriting can boost insurers' small-business relationships

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