Independent Agent Advice Is ‘Critical,’ Say Small Business Owners
By: Olivia Overman
The Hanover Insurance Group recently released the 2020 Small Business Risk Report in conjunction with Forbes Insights, which concluded that “despite the increase in direct insurance writers, small business owners are reporting that independent insurance agents are more important than ever in helping them assess their insurance needs.”
The report surveyed small business owners nationwide to gain their views on agents, insurance exposures and the future. A key highlight from the report was that 72% of small business owners reported the advice of an independent agent as being critical to helping them make their insurance decisions, which represented a 12% increase from the 2018 survey.
“Each year, there are new risks that small business owners face,” says Michael R. Keane, president of core commercial at The Hanover. “Some of these emerging risks tend to be more complex, such as cybersecurity, employment practices and errors & omissions. With these risks come the need for coverages and solutions that go beyond the standard coverages and require the advice and expertise of an insurance professional. For these reasons, a majority of small business owners continue to rely on the guidance of independent agents.”
Agents are able to offer the most up-to-date advice on current and emerging risks due to investment in understanding the complex environment small business owners face, explains Charles F. Hamann, deputy president of small commercial at The Hanover. “We’ve seen our agents invest in education to expand their knowledge of these evolving issues so that they stay abreast of current risks and market trends their customers are facing,” he says. “As agents monitor these trends, they continue to educate their clients on new and evolving risks as well as the value of their insurance programs.”
When it comes to paying for the expertise and guidance agents provide, 79% of small business owners say proper coverage is more important than price. “We find that an educated customer focuses on value, not price, and that’s what an independent agent brings to the table,” Keane says. “They do want to do the right thing to ensure their business is properly protected.”
In this age of technology and all that it offers, it is surprising that only 2% of small business owners purchase their business insurance online, according to the report. However, considering the types of risks and the increasingly complex exposures small business owners are facing, owners are cognizant of the benefits offered by agents.
“Small business owners recognize the importance of having the right protection for their business,” Keane says. “This reinforces the value independent agents bring to the insurance buying process, especially as small business risks continue to grow and evolve. Our experience and data show us that businesses want the guidance and expertise of an independent agent to advise them through this process.”
In terms of technology, what small business owners are looking for is the ability to service their accounts online for routine transactions. “By enabling small business owners to access these servicing capabilities online, independent agents can continue to focus on providing their expertise and advice where it really matters, ensuring their customers have the right protection and insurance solutions,” Hamann says.
Olivia Overman is IA content editor.
Other key highlights from the report include:
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