Point/Counterpoint: Should Agents Worry About Small Commercial Going Online?

Should agents be concerned about small commercial clients going online for their insurance needs?


Perhaps a better question is, “Will agents be prepared when small commercial clients go online for their insurance needs?”

It’s already happening. With billions of dollars pouring into InsurTech annually to figure out how to disrupt the insurance industry, you only have to look at Uber and Airbnb to get a sense of the scope of change that’s coming. 

Naysayers will point out that the industry has been touting the single-entry multicarrier interface and other promised technological game changers for decades, and we’re still not paperless. Or that people use the internet for research, but still want to deal with a “real” agent when it comes time to buy. Perhaps—but what are the consequences if they’re wrong?

Remember when a “Kodak Moment” referred to a special moment that would never be forgotten? Today, it’s a reminder of how an iconic American company went bankrupt because they refused to anticipate their customers’ needs. As soon as consumers understand what’s possible, they’ll never again accept yesterday’s status quo.

Even if you believe an automated online insurance purchasing experience is a pipe dream, independent agents still need to leverage technology to enhance the client experience. The insurance-buying process is complicated and frustrating. There’s too much paper, too much back and forth. Buyers want and deserve more.

As the late Theodore Levitt, Harvard marketing professor and economist, said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” Agents who are able to grasp that concept and embrace technology’s ability to improve the process will find job security as true advisers.

As evolving technology continues to transform our industry, the key will be to make ourselves indispensable to the insurance consumer with knowledge and insight. In the future, we’ll derive our value by providing counsel that clarifies a complex subject, not peddling products. If we can leverage technology to make what has traditionally been a painful experience more user friendly, even better.

—Scott Franklin, president & CEO, Lanier Upshaw


Over the past few years, several national carriers have attempted to develop a platform for business owners to quote, bind and issue their own small commercial policies online.

Because the direct access approach has been successful in personal lines and even the commercial auto space, the endeavor appears worthwhile on the surface. Wouldn’t many people would prefer to buy their products online, without the interference of a middleman? 

In reality, acceptance of direct access in small commercial lines has been minimal. To date, the vast majority of small business customers still prefer to use an independent agent to find solutions for their insurance needs.

Why has buying commercial auto online been thriving for many years, while there are very few successful online platforms for the small business owner? The answer is simple: There are very few coverage variations on a commercial auto policy.  A standard commercial auto policy, for the most part, not only complies with state law, but also covers the basic liability and physical damage without too many complicated exclusions or conditions.

Compare that to the insurance needs of the average small business owner who has even the most basic exposure. Every small business has its own unique nuances.

My agency has a motto: “There is no such thing as a simple store on Main Street.” The store could be located 1,000 feet from the ocean, or it could have a cooking exposure or a vacancy issue, or maybe it supports a local sports team. From a coverage perspective, this insured requires optional coverage extensions that the “Brand X” online insurance company simply cannot address.

Isn’t it in the business owner’s best interest to purchase their insurance from a trusted distribution model that can customize and present various carrier options, offer greater coverage advice and ultimately provide more value?

Independent agents should certainly be aware of online options for small commercial lines. But those who provide the best value for the small business owner should not be concerned.

—John Scirocco, Jr., president & CEO, Scirocco Insurance Group