Businesses with fewer than 10 employees, representing 80% of the small business market, are significantly underserved by insurers – this gap creates a great opportunity for new, innovative business models, products and processes that challenge the insurance status quo
Morristown, NJ (Dec. 12, 2016) – Majesco, a global provider of core insurance software, consulting and services for insurance business transformation, has published a new thought leadership report, titled The Rise of the Small-Medium Business Insurance Customer: Shifting Views and Expectations … Is Your Business Ready for Them? Based on original primary research with small-medium businesses (SMBs), the report exposes significant gaps in performance between insurers and the other major suppliers SMBs rely on to run their businesses. Notably, SMBs with less than ten employees, which make up nearly 80% of all U.S. firms, have significantly negative views of insurers and employee benefits providers, creating an opportunity for new, innovative business models, products and processes from existing and new start-ups.
“The research reveals that SMBs find insurance complex and confusing relative to the other products and services they need to run their businesses. Current insurers are not meeting needs or expectations such as the ability to create customized products available from a range of options rather than lowest price and through multiple channels, reflecting the increasing demand for personalization across the customer journey,” commented Denise Garth, Senior Vice President of Strategic Marketing, Industry Relations and Innovation at Majesco. “The result is a view of insurance as a low-loyalty, low net-promoter score commodity that opens a window of opportunity for new business models and InsurTech start-ups that could rapidly shift market leadership.”
The research assessed SMB owners’ and decision-makers’ perceptions across ten common industries they do business with regularly, including P&C and life insurance and employee benefits, finding that all three are among the worst in terms of “easy to do business with” from researching to buying and servicing insurance. Loyalty is significantly lower for small and medium sized businesses compared to other industries, highlighting the commodity view of insurance and a new bar for loyalty. This sets a trajectory of change for SMB insurance similar to personal insurance, but at a faster pace that will likely accelerate market share shifts.
In addition, the two larger SMB segments are more progressive than the smallest segment in leveraging new technologies like smart devices in offices/buildings or alternative payment methods like ApplePay, but we should expect participation to expand among all segments as these technologies mature. Roboadvisors offer a unique bridge between personal and technology capabilities to a market that is diverse in needs and expectations, and the likelihood of the two largest SMB segments to use this technology reaches nearly 50%.
The new thought leadership paper, The Rise of the Small-Medium Business Insurance Customer: Shifting Views and Expectations … Is Your Business Ready for Them?, is available on the Majesco website to download, or you can request a copy via email — [email protected].
Majesco enables insurance business transformation for approximately 146 insurance customers by providing solutions which include software, consulting and services.
Our customers are insurers, MGA’s and other risk providers from the Property and Casualty, Life, Annuity and Group insurance segments worldwide. Majesco delivers proven software solutions, consulting and services in the core insurance areas such as policy, billing, claims, distribution management, BI/ analytics, digital, application management, cloud and more. For more details on Majesco, please visit www.majesco.com.