Nearly 80% of middle market businesses in the United States are concerned about making it through the economic downturn caused by the COVID-19 pandemic, and they’re looking to their insurance agents for more support, according to new Agent Authority research from Nationwide.
The research uncovered a number of key themes for middle market business owners and commercial insurance agents. First and foremost, business owners are confident in their insurance agent’s ability to serve their protection needs, and they trust their agent’s advice. However, the results reveal that many middle market business owners struggle to understand the current coverage, thus presenting opportunities for agents to provide personalized attention and advice for clients.
“Middle market business owners really do rely on their agents for advice and education,” said Linda Stueber (pictured), vice president of Nationwide’s middle market commercial team. “Now more than ever, it’s vital for agents to help business owners fully understand the coverage they have in place, adapt to new or changing risks, and be proactive in addressing those risks or gaps.”
According to Nationwide’s research, 95% of agents and 84% of middle market business owners agreed that insurance agents are always there when needed. Furthermore, 93% of agents and 89% of middle market business owners agreed that insurance agents have a vast knowledge of different types of industries and protection solutions.
But there’s still room for improvement. The majority of middle market business owners (71%) said they find it hard to understand what is and what is not covered in their policy. Many also reported finding it hard to differentiate between types of coverages and finding the best price for their needs. To address these challenges, Nationwide advises agents to look for new opportunities to initiate touch points with clients. Agents can also point clients towards Nationwide’s My Loss Control Services, which offers digital safety resources, virtual consultations and more for business owners looking for quick technical advice.
“One of the most interesting aspects of this research is the fact that it was carried out during COVID-19. We have some tough challenges from an economic standpoint right now,” Stueber told Insurance Business. “What’s interesting is that insurers want agents to talk with them about the challenges their business clients may be facing as a result of COVID-19. For example, if an agent has a restaurant client, that restaurant’s business model might have evolved during COVID-19, and the insurers really want to know that. The other point made clear through the research is that the actual insureds are looking for their agents to give them advice. They’re seeking additional information on how to manage their businesses through the pandemic.”
Middle market business owners expressed deep concern about the plight of their businesses during today’s economic turbulence. This concern, according to the Nationwide research, has taken their attention away from their insurance needs. In fact, nearly seven in 10 respondents said they’re too concerned about the future of their business to be thinking about insurance right now.
Stueber commented: “Middle market business owners wear many hats. Right now, based on the interactions we’ve had with our middle market customers, I would say they’re very focused on their businesses, whether it’s keeping current customers, trying to get new customers, supporting employees and staff, implementing new health and safety measures, and so on. If an insurance issue came up – for example, they’re a restaurant who took on new delivery exposure during the pandemic – then they may have reached out to their agent to ensure they have coverage, but if they’ve continued to operate their businesses as normal, then they might not have spoken to their agent because they’re more focused on keeping their business up and running.”
While middle market business owners are perhaps less focused on insurance right now, that doesn’t mean their agents can fall off the pace, Stueber stressed. Now is the time to consider new and different risks that clients may be facing, she added, like cyberattacks as employees work remotely, or innovative technologies like telematics to help them operate more efficiently and safely.
Another significant point to come out of the Nationwide research is that middle market business owners want a highly digital experience, as well as personalized guidance from their insurance agent. While 81% of respondents said they feel it’s important to work with an insurance agent with a local office close by, 51% said they prefer to handle their insurance needs digitally, highlighting a need to offer both digital and personal interactions.
“Personally, I think middle market business owners want digital interaction as part of the service process or the handling of their account, but I’m not as confident they want it in the up-front transaction,” said Stueber. “By that I mean, when a client comes to an agent with a middle market account - on the low end of middle market, they might be paying $100,000 and on the higher end of middle market, they’re paying well over $1 million - that’s not going to be a customer who decides to go on to their laptop and input information and get a quick quote on their coverage. So, I don’t see a lot of digital interaction up front.
“They may share information electronically with an agent in order to get a quote or to share information about their business, but I think where a customer wants more digital interaction is with additional things like telematics support - either with the agent giving some advice on telematics, or working with their insurance carrier on telematics solutions. As we get into various claim situations, the insured may enjoy a digital interaction because we can respond more quickly to them, they can track their claim easier and that type of thing. But for a middle market customer, I see the digital interaction with the agent and the company more through the process or the servicing of the account.”