Let’s get straight to the point: Buying insurance is frustrating. Even with all of the technological advancements we’ve made in the past 20 years, the process of getting and managing insurance hasn’t gotten much easier, especially for small to medium-size businesses who don’t get the same service as their larger counterparts.
However, as some industry players make progress on underwriting, pricing and distribution and venture capitalists start backing startups, who are ready to transform and disrupt the insurance industry, we’re starting to see a shift in the way businesses are choosing to buy and manage their insurance.
So, what exactly is the problem?
While the Internet has been an incredibly useful tool for finding information on the product or service we are considering, this has not translated to the insurance industry. There is plenty of information about certain insurance types and policies, but more often than not, the content is missing the mark. To truly understand what coverage they might need for their company, business owners usually have to reach out to brokers or insurers for answers.
Prolonged quoting periods.
Right now, in order to get insurance, business owners must either get in touch with a broker or the insurance provider specifically. Even the process of getting a quote, or pricing information for insurance, can take two to four weeks, and none of it exists online.
Online management of business insurance policies is something that has been slow to adapt to the 21st century. After a company buys an insurance policy, they are sent a 200-plus-page PDF, promising that their business is covered should anything bad happen. The length isn’t really the issue here, rather the limits around the document. Business owners have no easy way to access, search or remember when their policies are up for renewal. This isn’t ideal if you’re a business owner
Business owners are busy.
Business owners have a million and one things to worry about outside of their insurance policies. After jumping through hoops with an insurer or broker to get a quote, in addition to the lack of education and transparency in pricing online, you can almost guarantee that these business owners will buy the first policy they’re offered. It’s not that business owners don’t see the importance of insurance; they simply don’t have the time to really deal with it.
They don’t get what they pay for.
Have a quick question about your policy? Not so fast. Insurance companies are met with some of the worst net promoter scores out there. In turn, business owners get some of the worst customer service and should expect a long wait when dialing in for an answer.
Let’s not forget about the inability for business owners to manage their policies digitally, which means even more time on the phone when a policy is up for renewal. Technology is helping
We know how important insurance is to running a successful business, but it’s clear that some serious changes need to be made. According to CBInsights, investors poured $2.65 billion into insurance startups globally in 2015, compared with only $740 million in 2014. This has a lot to do with the loosening of regulatory laws around insurance, which allows these investors to put their money into insurance technology startups that are hoping to change a broken industry, desperate for innovation.
Companies such as Oscar and MetroMile have already seen great success revolutionizing personal insurance types, but unfortunately the same cannot be said for those looking to buy business insurance, especially when it comes to small to medium-size businesses.
When you’re just starting out as a business or if you’re outgrowing your small-business status and becoming a medium-size business, purchasing and managing the right insurance is a harrowing process, to say the least.
The best way forward is by constantly getting feedback and working hard to improve the options for small and mid-size businesses based on that data. There is an enormous opportunity in this untapped market to use technology, data and design to make the entire process much easier for business owners.
Startups and venture capitalists taking on this challenge means the writing’s on the wall for the insurance industry: Innovate or get left behind.
In today’s world, the customer is all about finding something faster and easier, and if that option exists, trust us, they’ll take it. Bringing insurance online does not necessarily mean a complete reinvention; it just means a warm welcome to the 21st century, and we’re waiting with open arms.