According to a new Deloitte study, 51% of business owners are willing to address their commercial insurance needs online.

In this video we address the online commercial insurance marketing opportunity for independent agents. Understanding the market opportunity allows us to better our agency to capture more commercial insurance leads.

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Video Transcript

Hello, everybody. How’s it going? Ryan Hanley here, coming to you live from my makeshift office in The Murray Group, my wife’s family’s agency in Upstate New York, Albany, New York.

Today, I want to discuss with you the online commercial insurance market opportunity and a new report that has come out from Deloitte, which actually breaks down a lot of really interesting things that I think we all could find very useful in understanding what commercial lines of insurance could mean to our agency if we start to attack it as a product line, through digital marketing, through e-mail marketing, through search engine marketing, using our websites and content marketing – all the good stuff that we talk about here on Agency Nation all the time. We’re not going to talk about specific tactics today, but ultimately just what that opportunity is and what we can do to address it?

This is a really cool report. I will put a link in the show notes for this. I’ll put them down in the comments section. I will also have them in the blog post that we produce later on Agency Nation, which will have the replay of this video. I’ll make sure that there’s a link to this report. There’s an infographic that goes along with it as well that will be included. There’s lots of good stuff.

The Online Commercial Insurance Market Opportunity

This report is called “Voice of the Small-Business Insurance Consumer.” Again, it’s from Deloitte. Here’s what they did. They surveyed over 700 businesses of all different sizes, ranging from less than $100,000 annual revenue, up to a group of $5-20 million in annual revenue. They asked them about their propensity to search online, find an insurance provider on the Internet, and then ultimately purchase direct.

That’s what this survey was geared towards. Would commercial lines insurance buyers be willing to buy direct? Would they be willing to purchase direct from an insurance carrier? What were they looking for from that transaction?

What I’m going to share with you are some of the tidbits I think we can take out of this report and use in our agencies. There’s some interesting stuff, in terms of how we can set up our business and what people are ultimately looking for from an online provider, and how we, as agents, can step into that role and be the best of both worlds. Let’s get right into it.

The thing that I find to be the most interesting is one of the questions they title “Taking the Plunge.” This is essentially ranking, as the purchaser of insurance for your business, what are the things that are keeping you from going direct to an insurance carrier?

The absolute #1 issue:

41% of the respondents ranked this as the #1 reason they are unwilling to purchase commercial insurance directly from an insurance carrier, is that they do not trust the insurance carrier to deal with them fairly.

Remember, as agents, to a certain extent we are an extension of those carriers. I know that contractually that is not the case. I know that we are independents and that we are our own people. But remember, none of that matters. What matters is the perception of the insurance buyer and that insurance buyers see us, in many regards, as an extension of that insurance carrier.

If what we are hearing is that the #1 issue that is keeping insurance buyers from going direct is trust, then we need to step in and use that as ammunition in our marketing. What I mean by that is we need to do everything we can to establish, to keep, to build, to enhance the trust between ourselves (the independent insurance agents) and the commercial insurance buyers that we do business with.

The right insurance carrier, with the right mentality, can start to put large sums of money into building trust directly with insurance buyers. If trust is the single thing keeping them from making that connection, if that’s the thing, then we have to make sure that we maintain the trust that we have with our insurance consumers.

The moment a carrier steps in and starts to build that trust, what I’m seeing here is that insurance buyers will be willing to give them the time. They will be willing to give carriers a shot directly for their commercial lines insurance if there is trust. It is across the board the #1 reason.

The next-closest reason for not purchasing directly with a carrier is that they couldn’t properly assess the financial stability of the insurance company. I think everyone who’s sold insurance before knows, at least to me, that answer is something that sounds good on a survey but isn’t an actual buying reason.

When we work with our commercial customers, most of the time they’re trusting us. They’re trusting us to put them with a carrier who has good financial status. Again, it goes back to that idea of trust. Trust is the thing. That is the reason that they’re not bypassing us.

They rely on us and they trust us, the people they interact with every day. We are the accountability factor for that carrier that we ultimately place our commercial insurance buyers with. I find that to be incredibly interesting. That’s what’s keeping them from going direct.

That being said, what are some of the things that they want to look at? The #1 policy that these businesses would be interested in buying direct from an insurance carrier was general liability, followed by property, BOPs, commercial auto, then group benefits, workers’ comp, and professional liability.

67% of these businesses said they would be willing to entertain buying general liability directly from an insurance carrier. What does that mean to the independent insurance agent? It means that online, you need to be talking about general liability.

It means that general liability is the “auto insurance” of the commercial world. It’s this thing that every business owner who’s ever had to purchase coverage has in some way heard of this term, understands that it’s important, and understands that their business needs to have it. Whether it’s for a certificate of insurance, to rent a space, or what have you, they’ve come across and dealt with general liability.

For that reason, they are going online and searching for resources for general liability, and they are open to building a new relationship with someone based on their need for general liability. If you are thinking about access in this market, there is an incredible interest level in general liability for commercial businesses that are interested in purchasing commercial lines insurance online.

Huge Opportunity in Commercial Insurance Referrals

Huge opportunity: general liability, property, and BOP, which makes a ton of sense. These are the baseline policies. These are the policies that we want to address first and foremost. Things like workers’ compensation and professional liability, 30% of the respondents said that they would be interested in. But if we’re starting from scratch here (I’m going to make the assumption that all of you are), you want to absolutely be addressing all the issues that deal with general liability.

That being said, let’s move on. I’m going to pull up a graphic here for you guys. This graphic is outlining the respondents, “How open are you to purchasing direct online,” by demographics. We understand that trust is the #1 reason why people are not going direct.

But trust can be built over time through good quality marketing, consistent marketing, consistent messaging. In the personal lines insurance base, this is what State Farm, Allstate, Nationwide, Progressive, GEICO, all those companies are trying to do with the marketing that they put out into the world every day. They’re trying to build trust.

Then the next step was, what lines of business are providing the biggest opportunity? We determined that general liability, being a policy that so many business owners are familiar with, it makes a great entry point into this market. It’s something that commercial insurance buyers would at least be willing to entertain finding a new provider online. That makes complete sense as well.

Let’s look at, by demographics, business owner propensity to purchase direct. Again, I’m using “purchase direct” not because I believe that insurance buyers should go direct to a carrier. I wouldn’t be doing all this work for independent insurance agents if I thought that they should. But rather, if they’re willing to go direct online to an insurance carrier, that also means that they would be open to finding an independent insurance agent online.

This is providing the opportunity for us to put our content marketing, our brand, our agency, our people, all the things that we talk about on Agency Nation all the time, out in front of them and potentially capture those people who would consider going direct.

Well, why go direct if you have an independent insurance agent who can provide you with all the same things that you’re looking for from a direct relationship, but now you have the personal relationship that you get with an independent?

Let’s take a look at this chart. This is basically breaking down demographics by age and by revenue of their business as to their propensity to buy direct online, meaning opportunity to capture them in the digital space. This is ranking from very likely in blue, somewhat likely in green, and then not very likely at all in dark blue.

Likelihood of buying commercial insurance online

Let’s just take the total combination of light blue and green and dark blue, instead of having that somewhat, because I think that muddles the conversation. Let’s just say you would potentially be willing to go online and find a new provider of insurance if you are either very or somewhat likely. Then you’re not likely would be other. It’s kind of yes or no. Let’s just assume that.

62% — 62% — the overwhelming majority of business owners age 26-34 – the Millennial generation, the people who are creating startups, who are just coming into money or breaking off from their first career and starting businesses, whether they’re local or internet, this is that next wave of great business owner. 62% of these business owners would be willing to find a new provider of insurance online.

That right there, in and of itself, basically sets the stage for the opportunity. If your entire business is based around the 65-and-over market, if you’re getting out of the business in five years, then that works fine.

But if you’re planning on being around for 10-20 years, that older generation, that Baby Boomer generation, they’re cycling out of ownership. They’re starting to perpetuate their own businesses and pass them down. They’re selling, merging, passing them down to the next generation, being bought out, what have you, adding new partners, and sailing off.

Those people, the 65-and-over crowd, only 46% of them would be willing. But still, 46% is not a crazy number. 46% is only 4% from 50/50. You’re still looking at a very large percent of the population.

When you look at that top line of this, that overall (this is also mirrored on the far left, in the big graph), 51% of business owners surveyed by Deloitte would be willing to go online and find a new insurance provider. In this case, possibly purchase direct online.

But as an independent insurance agent, we have to think. If we’re doing our job in our local market, we can capture those people and give them the best of both worlds: access and availability that you would get from a direct, but with the relationship and expertise of an independent insurance agent.

51% of business owners would be willing to do that. That’s huge. That’s huge. The B2B space, the commercial lines market, the commercial lines opportunity for us is enormous. We’re seeing this at TrustedChoice.com as well.

Just building off my experience at TrustedChoice.com, about 41-45% of our traffic on a monthly basis comes from commercial lines clients, so people doing commercial lines related searches and finding TrustedChoice.com. The majority of our traffic is personal lines.
But in the month of May, we had our very first month where more referrals came through our system – over 4,000 – more referrals came through TrustedChoice.com and were connected to independent insurance agents on the commercial line side. We had our very first month where there were more commercial lines connections made than personal lines connections.

TrustedChoice.com is just one place to capture that. We’re probably one of the larger lead – we don’t use the word “lead,” but rather “referral,” because all the connections are one-to-one – business generation opportunities. TrustedChoice is one of the larger, especially when you think about the fact that we only focus on independent insurance agents.

If you’re also doing this with your own website, that’s where the rubber really meets the road, is addressing commercial lines risks. I’ve told this story many times, and I usually don’t like these to go longer than 20 minutes, so I’m going to wrap this up pretty soon here.

I’ve told this story many times, but I created a video titled “What is New York State’s Short-Term Disability?” back in 2012. I did that because it was a question that I received from one of my clients. I figured if one of my clients has this question, why not just answer it for everyone in the market? If one person has the question, I’m sure many more do as well.

I answered the question, two minutes or less. Held my cell phone up like this, “Hi, my name is Ryan Hanley. I work for The Murray Group Insurance Services. Today, we’re going to answer the question: what is New York State’s short-term disability?”

That video, which is 1 minute, 32 seconds long, was by far – by far – the largest revenue-generating piece of content I have ever created in my entire life, a 1 minute, 32 second video explaining what is New York State short-term disability.

The reason for that is independent insurance agents don’t often explain, in New York State, what New York State short-term disability is to business owners. It’s a silly little policy mandated that if you have an employee, you have to have this coverage as well. It’s just like workers’ comp in that way. I think it’s like $44/year per female employee and $19/year per male employee. It’s a tiny, little premium.

Well, one of the major carriers in New York State, back in 2012, decided to non-renew all their clients. They were getting out of that line of business. They were getting out of short-term disability in the State of New York. They sent all their clients non-renewal letters, “Hey, non-renewal. You’re going to have to find a new carrier for this coverage.”

I was the only person that had ever addressed that commercial lines risk and explained it in simple language in 1 minute, 32 seconds, very easy to consume. I was the only person that had ever done that in history. Because of that, for about a six-month period, my phone rang off the hook.

I didn’t just write New York State short-term disability. I also wrote the workers’ comp for all those people, the liability, the property, the professional lines, and everything else they had, because I backdoored in through this tiny policy, because I was addressing the fact that commercial lines insurance buyers are just as hungry for information about the products that they’re purchasing as personal line shoppers.

Remember, they’re human beings. Just because you think you have a great relationship with them in a business context doesn’t mean that they’re just going to pick up the phone and call you with every question they have.

Many, many commercial lines insurance buyers are going online to research coverage, to find out what else is available, just like they do with every other product or service they buy. It is very important, as independent insurance agents, that we are aware of and address the commercial insurance market opportunity.

It’s huge.

The online commercial insurance market is the low-hanging fruit today in the digital marketing space for insurance.

Car insurance, incredibly tough, very stuffed with information and adds. Homeowner’s insurance is filling up. Some of the ancillary personal lines coverages, there’s still some opportunity in. But in commercial lines, incredible, incredible opportunity.

I hope all of you will take the time to start to address the questions in your local market about commercial insurance on your website. If you could do it in video, God bless you. It’s a great, great way to get content out quickly. If you have any questions about how I did the videos myself, just leave them in the comments.

I appreciate you guys for showing up. With that, I’m going to log off here and say thank you to all you guys.

Thank you,

Ryan Hanley

P.S. Click here to learn more about receiving commercial lines insurance referrals from TrustedChoice.com.

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