I saw a headline recently Small Commercial Buyers Moving Online (http://www.insurancejournal.com/news/national/2013/06/26/296692.htm) that caught my attention. The article cites a recent Deloitte study that had some interesting statistics.
When I see a study with statistics, my first question always is “what was the sample size?” If the sample size is too small, the findings aren’t that reliable. The article says that the study surveyed 750 business owners, so without any more information on the study we’ll say that is a reliable number to give us insight into what the Scottsdale small business community is thinking.
- 52 percent of small businesses are now ready and willing to buy their insurance direct from a carrier over the internet without an agent or broker
- 15 to 20 percent are “very likely” to shop for coverage and buy it online if given the opportunity
- About 33 percent are “somewhat likely” to conclude a transaction over the Web for one or more of their small-business coverages
- About 50 percent said they’re not very likely to buy online
Why would a small business want to buy its commercial policy online?
There is really only one reason why any business would even consider buying direct and that’s because they don’t find value in using an insurance broker. There may be many reasons why they don’t find value, but it seems to me that there are two main reasons. The first is that they’ve had a bad experience with a broker. We’ve all heard stories of businesses that can’t stand their insurance broker for one reason or another. Maybe they didn’t take the time to learn about the business to correctly insure it or only care enough to call at renewal but there is no real relationship or trust there.
The next reason I see is that businesses think they will save time buying their Scottsdale commercial policies directly from the carrier online. This is understandable with how many people have gone online to get quotes and buy their personal insurance, but I think it is a little misguided. A commercial policy may be straightforward with some businesses but others are somewhat complex and figuring out what coverage is the right one is both time intensive and critically important. Think of the amount of time you lose when you find out that you chose the wrong coverage and have been paying for a policy that doesn’t cover you correctly.
Why choose an insurance brokerage?
I will admit that I am bias on this point, but for good reason. As I mentioned earlier in the article, you need to make sure your policy covers what you need it to cover or you could take a substantial hit or lose your business. When asked this question, I would counter with “why NOT choose an insurance broker?” When you call a broker, not only do they lend their expertise which is important, but they do the shopping for you among many different insurance carriers. Do you know how long it would take the average person or business to compare or even find 20 different insurance carriers? There’s no hard number, but if each company takes 15 minutes, you’re looking at 5 hours of time invested in finding your insurance policy. Give us a call and you can figure out something better to do with those 5 hours.
