April 05, 2023

Tim Lovett & Jeff Shi: Solving for small commercials

54 minutes

It’s not easy for small and medium-sized businesses to find the right protection, even though many more small business opportunities have emerged since the pandemic.

Today, Sabine taps into the knowledge of two industry veterans: Jeff Shi of InsurTech Groups and Tim Lovett, formerly at The Hartford, now at Three Insurance, and asks them to understand the current situation with small commercials in the US market.

KEY TAKEAWAYS

The size of the small- and medium-sized enterprise (SME) market varies widely by region and industry. Globally, SMEs account for a significant share of the economy, employ a large share of the workforce, and generate substantial economic activity. Estimates suggest that SMEs make up over 90% of businesses in many countries and are often considered the backbone of the economy. However, due to their diversity and dispersed nature, it can be challenging to estimate the exact size of the SME market.

Insurers may have pulled back from small commercial coverage over the past two years for various reasons, including changes in regulations, declining profitability, and increased competition, as well as new regulations on data and ethics.

The small commercial lines market can present several challenges for insurers, including higher risk, increased competition, complex coverage, limited data availability, and pricing pressures. These challenges can make it difficult for insurers to operate effectively in the small commercial lines market, leading some companies to pull back from this segment. However, despite these challenges, there is still significant demand for insurance coverage among small businesses, and many insurers are finding ways to overcome these challenges and offer competitive products.

The products, services, and business opportunities that insurers evaluate today within the small commercial insurance market include technology-enabled solutions, specialized coverage, customized products, bundled products, alternative distribution channels, and risk management services. These products, services, and business opportunities aim to improve the customer experience, increase profitability, and differentiate from the competition in the small commercial insurance market. However, insurers must carefully evaluate each opportunity's viability and potential, as success will depend on factors such as market demand, competition, and the overall regulatory environment.

BEST MOMENTS

‘Small businesses often face a higher level of risk than larger businesses, and insurers may have decided that the risk associated with insuring small businesses was too high.'

‘Small businesses often face a higher level of risk than larger businesses, making it more difficult for insurers to assess and price risk accurately.’

‘Small business owners are often price-sensitive, and insurers may face pressure to offer competitive pricing, which can impact profitability.’

‘Insurers are exploring alternative distribution channels, such as insurtech start-ups, to reach small businesses and offer more convenient and accessible insurance solutions.’

ABOUT THE GUEST

Jeff Shi is the founder of InsurTech Groups, where he connects consumers with top industry partners by leveraging advanced processes and innovative technology. Jeff helps consumers better understand their policies to meet their unique needs.

Website: https://www.insurtechgroups.com/

Tim Lovett was at The Hartford Insurance Group when recording this podcast for six years. Tim helps small and medium-sized companies make better choices. He has a background in claims management and distribution, which enables him to educate and assist agents in growing their small commercial portfolios.

Website: https://ir.thehartford.com/

ABOUT THE HOST

Sabine VanderLinden is a corporate strategist turned entrepreneur and the CEO of Alchemy Crew Ventures. She leads venture-client labs that help Fortune 500 companies adopt and scale cutting-edge technologies from global tech ventures. A builder of accelerators, investor, and co-editor of the bestseller The INSURTECH Book, Sabine is known for asking the uncomfortable questions—about AI governance, risk, and trust. On Scouting for Growth, she decodes how real growth happens—where capital, collaboration, and courage meet.

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By Sabine VanderLinden

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