How to carve out more time to advise your small business clients

Small business clients want to spend less time filling out insurance application forms and more time getting advice from their brokers, an insurance technology expert says.

“Unlike personal insurance, where there is more propensity to go direct, small business owners still value the conversation with a broker,” Daniel Shum, partner and national insurance sector leader at Deloitte Canada, said Thursday in an interview.

But that conversation should be less about filling out the application form and more about getting advice from a broker on what insurance products the client needs.

Shum made his comments during an interview about Frank Insurance, a software product Deloitte is developing. Deloitte is looking for brokers to beta test Frank, which is intended to make it easier for clients to fill out application forms.

Frank Insurance will use data from database vendor Opta Information Intelligence, a Markham, Ont.-based unit of SCM Insurance Services. Opta’s existing products include iClarify, which provides information on properties.

Opta provides information on “not just the neighbourhood but that particular building – when it was built, what kind of restaurant it is, how they did on the last few health reviews and restaurant inspections,” said Shum, who is also Deloitte’s Guidewire practice leader.

Deloitte has completed a “proof of concept” of Frank Insurance, Shum said. The aim is to offer Frank as a subscription-based service using the cloud computing model, meaning that users do not have to buy a software license but would access it over the Internet for a fee.

Frank is intended to “free up the broker to have more of an insurance conversation and more of an advisor conversation,” Shum said.

For example, by using data from Opta, a broker could tell a restaurant owner what coverage the company should have based on its location.

“Because this business in located in Leaside, Ontario and based on the number of fires that have occurred on this street in restaurants, this is the coverage you should offer. It will provide that type of advice,” Shum said.

Opta iClarify is intended to provide information on specific buildings – for example how much the property is worth, how far is the nearest hydrant and whether or not it is protected by a sprinkler system.

Frank got its name because it is intended to let brokers provide advice “in plain English, not in legalese, in a way that’s easy to understand,” Shum said.

In developing Frank, Deloitte got some of its guidance from a survey of small businesses.

“While small business owners value having a strong and trusted broker/agent relationship, they’re not confident that their broker/agent understands their business and is incentivized to serve them properly,” Deloitte said in a report, Insurance re-imagined: Unlocking the small business opportunity to help Canadian insurance carriers grow, which was based on the survey results.

The online survey, conducted in 2016, was of 550 Canadian businesses with fewer than 100 employees.

In the report, Deloitte said some brokers do not have an incentive to spend the necessary time to educate small business clients because the size of the insurance transactions are too small. As a result, some small businesses are underinsured, incorrectly insured or uninsured altogether, Deloitte said.

“On average, only one in four small businesses has a strong understanding of their commercial insurance policy.”