The gap creates opportunity for innovative business models, products and processes that challenge the insurance status quo
Morristown, NJ, December 20, 2016 — Majesco (NYSE MKT: MJCO), a global provider of core insurance software and consulting services for insurance business transformation, published a new thought leadership report, The Rise of the Small-Medium Business Insurance Customer: Shifting Views and Expectations…Is Your Business Ready for Them?
Based on original primary research with small-medium businesses (SMBs), the report exposes significant gaps in performance between insurers and the other major suppliers SMBs rely on to run their businesses.
Notably, SMBs with less than ten employees, which make up nearly 80% of all U.S. firms, have significantly negative views of insurers and employee benefits providers, creating an opportunity for new, innovative business models, products and processes from existing and new start-ups.
Insurance ‘complex & confusing’
“The research reveals that SMBs find insurance complex and confusing relative to the other products and services they need to run their businesses. Current insurers are not meeting needs or expectations such as the ability to create customized products available from a range of options rather than lowest price and through multiple channels, reflecting the increasing demand for personalization across the customer journey,” commented Denise Garth, Senior Vice President of Strategic Marketing, Industry Relations and Innovation at Majesco. “The result is a view of insurance as a low-loyalty, low net-promoter score commodity that opens a window of opportunity for new business models and InsurTech start-ups that could rapidly shift market leadership.”
The research assessed SMB owners’ and decision-makers’ perceptions across ten common industries they do business with regularly, including P&C and life insurance and employee benefits, finding that all three are among the worst in terms of “easy to do business with” from researching to buying and servicing insurance.
Loyalty is significantly lower for small and medium sized businesses compared to other industries, highlighting the commodity view of insurance and a new bar for loyalty. This sets a trajectory of change for SMB insurance similar to personal insurance, but at a faster pace that will likely accelerate market share shifts.
In addition, the two larger SMB segments are more progressive than the smallest segment in leveraging new technologies like smart devices in offices/buildings or alternative payment methods like ApplePay, but we should expect participation to expand among all segments as these technologies mature. Roboadvisors offer a unique bridge between personal and technology capabilities to a market that is diverse in needs and expectations, and the likelihood of the two largest SMB segments to use this technology reaches nearly 50%.
The new thought leadership paper, The Rise of the Small-Medium Business Insurance Customer: Shifting Views and Expectations…Is Your Business Ready for Them?, is available on the Majesco website to download, or you can request a copy via email, [email protected]
Insurance business transformation is a journey of change and revitalization, a renaissance of Insurance. Approximately 150 insurance companies worldwide in P&C, L&A and Group/ Employee Benefits are transforming their businesses with Majesco’s solutions. Our market leading software and consulting services uniquely underpin the entire insurance value chain and are designed to empower insurers with the agility, innovation and speed needed to meet their transformation opportunities. Majesco’s solutions include policy management, new business / underwriting, rating, billing, claims management, distribution management, BI/ analytics, predictive modeling, digital platform with mobile and portal, testing services, cloud services, bureau and content services, transformation services, consulting services and more. For more details on Majesco, please visit here.