This article was produced in partnership with Intact Insurance.
David Saric, of Insurance Business, sat down with Keith Flynn director, commercial lines, Intact Insurance, Atlantic and Alastair Lebo, vice president, commercial lines, Intact Insurance, West to discuss how to grow commercial business in the SME space.
Commercial lines may have been in a hard market for four years now, but Intact Insurance sees the SME space as a tremendous growth opportunity both for commercial lines brokers and generalist carriers.
Brokers benefit from focusing on companies that are financially stable and customer-focused rather than trying to find the “ideal client,” according to Alastair Lebo (pictured right), vice president, commercial lines, Intact Insurance, West.
Brokers also have an opportunity to grow their SME book by finding solutions for innovative companies and advocating for clients who may operate in more complex business classes but come with industry experience and a good claims record.
According to Keith Flynn (pictured left), Intact’s director, commercial lines for Atlantic Canada, Intact is seeing a lot of opportunity across all classes in the SME space.
“We don’t want to be pigeonholed into being ‘good’ at only three or four classes of business,” he said.
“We are very focused on working with brokers to come up with underwriting solutions even for those customers who may seem challenging to place at first.”
As an example, he points to Intact’s recent policy for a microbrewery that had undergone a change in leadership.
“Usually, a facility with a high volume of alcohol sales is something an insurer would be more cautious about,” he said.
Additionally, the new owner of the brewery was a first-time entrepreneur.
“Instead of rejecting such a risk, it’s crucial to ask the right questions to really understand the business,” Flynn explained.
In this case, a favourable claims record and the owner’s previous microbrewery management experience led to a successful solution for the customer – and the advocating broker.
The new microbrewery entrepreneur’s personal financial stability also helped the broker place the risk with Intact at a competitive price.
The insurer’s Stability Advantage tool can result in up to a 25% price reduction on a commercial lines policy, through a soft personal credit check (with the customer’s consent).
“We work hard to be competitive on the premium front in the SME space, and Stability Advantage tool helps brokers deliver the best price to business customers,” explained Flynn.
He pointed out that the Stability Advantage soft credit check will not show up or affect a customer’s credit score and does not disclose any additional personal information.
“But, it can offer them a substantial saving,” he stressed.
In the end, the broker got their microbrewery client the insurance solution they needed because Intact used data, as well the broker’s insight, to get to know the customer’s business.
"We’re pursuing business in the SME space, and we believe the sophisticated way we use data benefits brokers and customers, regardless of the market cycle,” Lebo told Insurance Business.
Having access to analytical tools through an insurer helps brokers manage market cycles and minimize surprise rate hikes for clients year-over-year.
“We’re a firm believer in using the data that we have to support more sustainable, predictable pricing,” Flynn said.
Intact’s sophisticated, data-based underwriting in commercial lines lets the insurer flatten out peaks and valleys in market cycles.
This means Intact may adjust its pricing ahead of the rest of the market, with a view to long-term sustainability and with a careful consideration of the data.
“If we see a segment experiencing challenges, and our initial analysis suggests the need for an adjustment, we dig into the results and find what is creating this challenge,” Flynn explained.
“We then apply a targeted adjustment rather than applying it across all classes.”
Data analysis provides only part of the story. Brokers, as their business customers’ advocates, provide the rest, by educating the carrier on each customer’s experience, stability and potential.
Broker advocacy is particularly critical when the business is in an emerging industry.
“We want to be proactive and provide solutions aligned with the way the world is heading,” Lebo said. “We recognize that new businesses are forming, because of the climate transition and other market trends, and we want to be able to support them as best as we can.
“We rely on brokers to give us a full picture of their customers in these spaces – and in more traditional spaces – because we want that business.”
When brokers and carriers maintain a collaborative relationship to find the best solutions for their clients, everybody wins, Lebo noted.
“We encourage brokers to reach out to us and have discussions about anything they’re not sure about,” he said.
“We want to have that discussion and use our resources to come up with underwriting solutions and fair prices that protect customers and help broker build their book.”
Intact Insurance is Canada's largest home, auto and business insurance company, the choice of more than four million consumers. Its coast-to-coast presence and its strong relationship with insurance brokers mean the company can provide the outstanding service, comfort and continuity customers deserve. Intact Insurance is a member company of Intact Financial Corporation (TSX: IFC), the largest provider of property and casualty insurance in Canada and a leading provider of specialty insurance in North America.
