Rapid Embracement of Marketplace Trends and Digital Technologies Is Intensifying the Demand for a New Digital Era of Insurance
Majesco, a global leader of cloud insurance software solutions for insurance business transformation, announced the release of new primary research report, Building the Business Model for the Next Generation of Small-Medium Business Leaders, based on its third annual survey of small-medium business owners (SMBs) who make or influence insurance purchase decisions for their companies. The report underscores shifts in behaviors and expectations of the SMB market that demand insurers to rethink their business to retain their customer base and capture growth opportunities emerging for a growing and underserved market of over 30 million SMBs, which comprise over 99% of all businesses in the U.S.
“Embracement of digital technologies, new SMB market opportunities and the generational shift and influence of Millennials and Gen Z are rapidly redefining how insurers must engage and respond,” commented Denise Garth, SVP of Strategic Marketing, Industry Relations and Innovation at Majesco. “Over the next 7 years, Millennials and Gen Z will become the dominant owners and influencers in the SMB market as they launch new startups and take over the helm of existing businesses. This new generation of SMB leaders use digital technologies in their daily life and business which subsequently influence their behaviors and expectations, requiring new risk products, services, and engagement channels.”
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The acceleration of these market trends and digital technologies is broadening SMB interest in new insurance products, services and business models – putting insurers with innovative offerings in a first-mover position to win market share and fast-track growth strategies. Some key findings:
- Up to 38% of Gen Z and Millennial SMBs purchased business insurance online, within the 10-99 employees segment — doubling from last year.
- From 37% to 48% of Gen Z and Millennial SMBs use connected devices like security systems and cameras, thermostats and smoke detectors.
- Nearly 35% of larger Gen Z and Millennial SMBs offer employees discounts on life or health insurance if they use fitness trackers.
- Up to 32% of SMBs purchased on-demand insurance to cover an event or product for a specific period of time.
- SMBs have strong interest in value-added services – nearly 75% across all segments.
- SMBs have strong interest levels of nearly 60% in social and peer-to-peer features and business models.
- Among medium and larger Gen Z and Millennial SMBs, there is exceptionally strong interest in products using new data sources for pricing and underwriting risk.
- Gen Z and Millennials would strongly consider purchasing insurance from the “Tech Giants” including Amazon, Google, Apple, Netflix and others.
- SMBs are interested in buying insurance from sources other than agent/broker or company channels and they want to digitally manage their policies.
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The increasing demand for and use of digital technologies, the emergence of innovative new niche businesses, and the shift of the Gen Z and Millennials as SMB owners will require innovative new insurance business models, products, services and channels to capture the growth opportunities. The crucial and strategic question for existing insurers is: Are you ready to capture the tremendous growth opportunities in this vast market — but in a new, innovative and digital way?