Page 36 - 2016 State of the Market from AmWINS

36 | Am3W4 IN| SASmtaWteINoSf SthteatMe oafrktehte Market Competition is stronger than ever in the small
business sector. “Carriers that previously had
INDUSTRIES no interest in the small commercial space
are suddenly rushing to find distribution,”
SMALL BUSINESS says Tony Gresham, chief operating officer of
AmWINS Access, the small business division
Small businesses continue to benefit from ultra- of AmWINS Group, Inc.
competitive insurance climate
Capacity continues to pour into the space
from traditional and alternative sources,
including the insurance-linked securities (ILS)
market and global reinsurers, many of whom
are looking to deal directly with distribution
partners rather than with insureds.

Additionally, a number of new entrants to the
small business space are trying to disrupt the
traditional value chain. Berkshire Hathaway
announced in December 2015 that the
company will sell directly to small businesses,
and a plethora of startups are trying to change
the buying experience for smaller insureds.

“Increasingly, you are seeing firms trying to
figure out how to apply direct and web-driven
sales techniques used in the personal auto
space to small commercial,” says Ben Sloop,
president of AmWINS Access. “However,
our belief is that insurance is a people
business, and small commercial insureds
value the expertise and service provided by
independent agents. We have a fundamental
view that the winning business models
will ultimately use technology to empower,
not replace, independent agents – not
unlike the current trend in the investment
advisory space, where ‘robo-advisor’ tools
are increasingly being used alongside more
traditional brokerage models.”

“Retail agents are struggling to make the
economics of small commercial work,
given the small premiums and high service
component,” Gresham says. “We see some
retailers developing strategies that focus
less on the consultative needs of the smaller
insured. This leaves businesses at risk for
being inadequately insured. We can help fill
that gap by providing streamlined placement
and servicing for our retail partners.”

Even small businesses can have complex
exposures where it serves them well to deal
with a retail agent. “Professional liability, EPLI,