An agent needs to understand the wants and needs of their customers, and selling business owner policies (BOPs) for small businesses is no exception.
Here are four BOP statistics that broker-owners and agents should know about small businesses and their insurance needs:
BOP Statistics: Insurance Purchasing
Customers across industries expect an online experience. The general and commercial insurance industries have been slow to adjust.
- Approximately 36% of small businesses prefer to make insurance claims online.
- Nearly 48% of the customers in the same study say they prefer to renew or purchase their next policy online.
- Around 55% want to be able to track claims there, too.
- While nearly half of the market for small business insurance wants an online experience, only 24% are getting it.
This indicates a significant technology gap that an insurance agency can exploit by offering a more tech-enabled experience to small business customers. As younger small business owners enter the market for business owner insurance, the demand for online and digital sales experiences will only increase over time and become an expectation.
BOP Statistics: Insurance Claims
Many small business owners are hesitant to file claims, fearing that their premium increase will outweigh the potential compensation gained from filing a claim.
- The Hartford news reported that 40% of business owners are expected to file a claim over a ten-year period.
- The small business insurance company, Insureon, found that only about 8.8% of small business customers file a claim within a given year.
- With 40% of customers filing claims and some claims averaging $50,000, business owner policies (BOPs) are worth the cost to customers.
Some customers cited the hassle of filing a claim and the risk of increasing their premium as the reason for not filing. This can also be a significant selling point for potential customers who might be hesitant to purchase insurance, thinking it will be an unnecessary expense.
BOP Statistics: Insurance Insurable Events
Many small businesses lack the insurance necessary to pay their expenses in a disaster or legal action. But how frequently do high-risk incidents occur?
Overall, more small company owners had an insured event than was expected. This reveals a sizable gap of covered businesses that, although suffering insurable incidents, do not file claims.
BOP Statistics: Insurance Premiums
They say you can’t put a price on peace of mind. They may be true. These insurance premium statistics demonstrate the size of the market and the potential need for small businesses to purchase peace of mind.
- A study from The Hartford found that the most common claim for small businesses is burglary or theft, resulting in an average claim of $8,000, impacting 20% of customers.
- The most expensive claim made by small businesses is reputational damage, averaging $50,000.
- Other common claims include water/freeze damage and wind/hail damage, each impacting 15% of customers over a ten-year period.
What can a broker and agent gather from these insurance and BOP statistics? These costs are damaging to small businesses and potentially catastrophic when reputational damage is on the table.
A broker simply must effectively communicate the value to customers during the sales process — part of that communication should be offering a digital experience for the quoting and claim process to their customers who prefer an online experience.
Improve BOP Statistics For Your Agency
Utilizing an insurtech platform like Relay can enable a broker-owner to begin the move to advanced technology solutions by executing their quote-gathering process through the platform.
The platform enables a broker-owner to generate multiple customer quotes while entering one set of customer information for BOPs. The days of logging into various carrier portals and entering the same information repeatedly are numbered.
Using the Relay Platform can signal to customers their user experience is a top priority and includes streamlining the insurance quotation and purchase process. The quoting process becomes quicker and more accessible, all while improving the customer experience with attractive and branded proposals showing premium and coverage.
Have questions about these BOP statistics or about the value of insurtech? Contact us to learn more.