{"id":58280,"date":"2019-05-23T15:30:53","date_gmt":"2019-05-23T19:30:53","guid":{"rendered":"https:\/\/staging.majesco.com\/?p=58280"},"modified":"2022-11-09T18:14:01","modified_gmt":"2022-11-09T23:14:01","slug":"turning-high-smb-volume-into-insurance-product-and-service-growth","status":"publish","type":"post","link":"https:\/\/staging.majesco.com\/?p=58280","title":{"rendered":"Turning High SMB Volume into Insurance Product and Service Growth"},"content":{"rendered":"

In an industry filled with InsurTech startups, new MGAs and a host of ancillary organizations, insurance industry execs should be interested in the success of small-to-medium businesses (SMB). We know their power to produce great ideas, launch new businesses and operate with agility. We know their creative strength. We also know their hurdles, such as funding, talent gathering, operational constraints and the need for simple solutions to complex business headaches.<\/p>\n

But there is one trend we should see within InsurTech that will lend itself to insurance interest more than any other \u2014 SMB proliferation and growth. The rapid multiplication of SMB companies, that all need insurance products and services, is a trend that is going on within nearly every industry. Tech companies are on the rise. Services companies are on the rise. Despite historically low unemployment, new companies are managing to find enough talent to launch and grow. According to the U.S. Small Business Administration, the SMB market size is massive and continuing to grow \u2014 30.2 million businesses representing 99.9% of the market.<\/p>\n

Of course, SMB growth doesn\u2019t, by itself, translate into greater insurance sales. But because these businesses are significant drivers of the overall economy and they are where market trends and innovation emerge, insurers are finding great synergy between these kinds of new businesses and their own paths toward innovation and business model change. SMB  growth is increasingly powered by digital technologies that provide efficiencies and improve competitiveness, such as the ability to innovate with new products and services, scale quickly and cost-effectively, and broaden reach into existing or new markets.<\/p>\n

Segments highlight the opportunities.<\/strong><\/h2>\n

Majesco recently conducted its third annual SMB research survey that split SMBs along two lines. First, businesses were segmented by size using the number of employees. (1-9 employees, 10-99 employees and 100-499 employees.) Then, and most significantly, it was segmented by decision-maker age, splitting employee sizes into two groups; Millennials\/GenZ and GenX\/Boomers. Using these six groups, we identified trends related to demand and purchasing. Beginning next week, you can access Majesco findings by downloading our thought-leadership report, \u201cBuilding the Business Model for the Next Generation of Small-Medium Business Leaders.\u201d<\/p>\n

Trends point to shifting behaviors. <\/strong><\/h2>\n

In our recent consumer research aimed at understanding today\u2019s customers and their impact on insurance business models (see the customer report here<\/a>), we identified channel and purchase trends that are significantly correlated to customer age. It stands to reason that SMBs would also be subject to similar age-related insurance behavior and expectation trends \u2014 though these trends must be looked at through the lens of corporation size.<\/p>\n

Using both of our surveys for guidance, we found that embracement of digital technologies by SMBs will accelerate as Millennials and Gen Z become the dominant population among both consumers and SMB owners and leaders \u2013 and that is within the next 7 years! Their impact will be felt as they launch new startups and take over the helm of existing businesses. This new generation of SMB leaders use technologies to engage in new behaviors and businesses that require new risk products and services.<\/p>\n

However, we were surprised to find out that heightened expectations among SMBs are causing them to embrace some marketplace trends and digital technologies at a faster pace than consumers<\/strong>, intensifying the demand for a new digital era of insurance.<\/p>\n

Here is some of what we found:<\/p>\n