Heightened expectations among businesses are driving a demand for a digital era of insurance that embrace new technologies and approaches
Majesco, a global leader of cloud insurance software solutions for insurance business transformation, announced the availability of its annual report on the changing landscape of small-medium businesses (SMB), SMB Insurance Customers: Growth Opportunities Grounded in Grit and Resilience. The report, based on primary research, underscores the astounding shift of SMBs in adapting to new business models and accelerating their digital transformation. It underscores the need for insurers who seek relevance and growth in the SMB market must adapt and step up to provide new risk products, value-added services, and customer experiences … digitally.
“It’s no secret SMBs are a dominant market segment, with increasingly Millennials and Gen Z at the helm, that are a top priority for growth for insurers. Throughout the past two years they’ve shown creativity, grit, and resilience in adapting their business models which has changed their risk profiles and needs,” says Denise Garth, Chief Strategy Officer at Majesco. “As this year’s research highlights their changing views on digital solutions highlights the importance for insurers to respond with products, value-added services and digital experiences that align to the SMB expectations in order to capture the tremendous growth opportunities for growth.”
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As SMBs continue to adapt and shift their businesses, they now face a range of challenges including retaining and recruiting top talent, supply chain demands, inflation, climate risk, and technology risk with cyber to keep pace with their customer expectations and demands. As Millennials and Gen Z take the helm of new or existing businesses, they are using digital technologies in both in the personal life and business, further raising expectations on what they will expect from insurance in terms of digital risk products, services, and experiences.
This new report includes key findings that reinforce the changing views of SMBs and the opportunities that exist for insurers who respond including:
- The pandemic has raised the importance of insurance in the minds of business owners. This offers a unique opportunity to tap into this mindset and offer insurance solutions that will meet their needs and expectations.
- Overwhelmingly, adoption or expansion in the use of digital business models is one of the most critical shifts SMBs have made post-pandemic, with 81% of Gen Z/Millennial and 79% of Gen X / Boomer SMBs changing their views. With nearly a third of SMBs changing their business, there is a crucial need to proactively reassess SMB customers.
- SMB use of smart devices was incredibly high. Building and office monitoring apps reported the highest levels of usage. However, the largest increase in smart device usage was for recording driving usage and behavior at nearly 3 times the rate of use in 2018.
- Gen Z / Millennial SMBs were the early leaders in Digital Commerce in 2018 and are continuing their rise in usage in 2021 both in paying and accepting digital payments including options like Apple Pay, Venmo, Bitcoin and others. Both generational segments are more likely to accept payments from their customers using these digital methods as compared to making payments with them.
- SMBs adapted to meet a changing workforce with increased support in offering benefits to an increasingly diverse workplace. They provided insurance discounts based on fitness tracker data had impressive increases of 1.8x increase for Gen Z / Millennials and 3.8x increase for Gen X / Boomers, reflecting the growing focus on healthy lifestyles.
- Variable pricing gained strong interest across several different areas. The strongest interest was adjusting price and coverage based on whether the car is being driven or parked with 94% of the younger generation strongly interested. Both generations express interest in adjusting pricing based on personal versus business use at 81% for the younger and 70% for the older generation.
- An astounding 82% of Gen Z / Millennial and 71% of Gen X / Boomer SMB owners view a holistic, integrated digital experience across solutions including insurance to be of great value. Companies like Sofi, ADP, Intuit, and H&R Block are examples of companies who can provide a broader range of these solutions holistically, while also offering and supporting insurance through partnerships they have developed.