Over the past decade, selling small commercial insurance directly online to customers has gone from an outlandish idea to a reality. In a new report, Direct Online Small Commercial Insurance: 2020 Update, research and advisory firm Novarica projects significant growth in the market as insuretechs and major carriers alike try to serve America’s 30 million small businesses online.
“Novarica predicts that the market size for direct online sales of small business insurance will increase to $3.7B by end of 2020 and could grow to $12B by 2025,” said Matthew Josefowicz, President and CEO, and lead author of Novarica’s new report. “Given the underlying demographic and technological conditions, commercial lines insurers who are not already active in the direct sales space should consider their strategy now and make necessary investments in technology.”
Among the key findings of the report are:
Sales in 2019 were slightly less than expected, indicating the challenges of the direct small commercial market, even for established players. However, the underlying market factors for the sector are solid, and given recent activity Novarica expects future growth.
The best opportunity is the middle 60% of small businesses. Very small businesses are unlikely to be profitable for insurers, and the largest accounts are accessible by traditional channels.
Insurers continue to enter the direct small commercial market, including large insurers who have launched quoting and sales tools as well as regional insurers who have launched line-of-business-specific direct sales arms.
A preview of the report is available online at https://novarica.com/direct-online-small-commercial-insurance-2020-update/, and desk copies are available to qualified media. Please contact media@novarica.com or call Victoria Spitz at 833-668-2742 Ext. 130 for more information.
About Novarica
Novarica helps more than 100 insurers make better decisions about technology projects and strategy. Its research covers trends, best practices, and vendors, leveraging relationships with more than 300 insurer CIO members of its Research Council. Its advisory services provide enterprise phone and email consultations on any topic for a fixed annual fee. Consulting services range from strategic blueprints and roadmaps to vendor evaluations. Other special programs include a Silicon Valley Innovation Tour, InsureTech Summits, online learning courses, and more. https://www.novarica.com/