P&C Carriers focusing on commercial lines are positioned for significant growth. Why? Because the commercial sector is rife with opportunity. Here are three reasons we all should be honing our commercial lines strategies.
1. There’s Less Digital Competition
The digital revolution has taken personal lines by storm, and the pandemic has accelerated the process. Numerous insurtechs have entered the market, and many large carriers have grabbed market share by selling online, direct-to-consumer. While increased competition is good in many ways, and digitization promises to improve insurance processes from underwriting to claims, it also means that the personal lines landscape has gotten somewhat crowded.
The same has not been true for commercial lines.
According to an article in Insurance Thought Leadership, commercial lines have been left out of the surge in digital and insurtech activity – but this is starting to change. Due to new digital capabilities and customer demands, digitization is coming to commercial lines.
Right now, there is a window of opportunity for digitization in commercial lines. Insurance companies need to act fast – before the window closes.
2. Entrepreneurialism Is on the Rise
Insurers have another reason to focus on commercial lines: there’s no shortage of businesses to serve.
The pandemic fueled what Forbes has called a “startup frenzy.” In July 2020, 551,657 applications for starting a business were submitted in the U.S., an increase of 95% compared to July 2019 and an all-time high. New business formation also increased in other countries, including France, Japan, and the U.K.
Of course, the situation wasn’t rosy for all businesses. The pandemic put pressure on many companies, and some didn’t survive – but recovery might be just around the corner. According to the National Association for Business Economics (NABE), 73% of participants on the NABE Outlook panel believe that the economy will return to pre-pandemic GDP levels by the second half of 2021.
There are more than 30 million businesses in the United States. The U.S. Small Business Administration says that approximately 99.9% of firms in the U.S. can be classified as small businesses. Regardless of the size, companies have insurance needs, and small business owners with fantastic customer experiences and digital enablement in personal lines will likely want the same tech to serve their commercial insurance needs.
3. New Tech Makes It More Efficient
Commercial insurance can be more complicated than personal insurance, so it’s not surprising that digitization started in the personal lines sector.
But technology has made remarkable strides in AI, Machine Learning, and RPA (Robotic Process Automation) in recent years. More and more, the same advantages that have been seen in the personal sector – such as better risk management, streamlined underwriting, personalized coverage, fraud detection, and fast claims processing – can be experienced in commercial lines.
Carriers serving both markets should look to use the same core system to manage both their personal and commercial business books.
Insuresoft is Ready to Support Your Growth
You already know that the Insuresoft Diamond platform is a go-to core system for personal lines management, but did you know that we also support commercial lines? We’ve invested big resources into advancing our commercial lines and multi-line capabilities in anticipation of the commercial lines boom.
If you’re ready to seize the opportunity in the commercial lines sector, the Diamond Platform can help. Request a demo to learn more.