How to grow your specialty lines consumer base
Some specialty lines markets such as cyber are facing difficulties identifying new buyers and growing the customer base, says Dan Trueman, chief underwriting officer at insurance provider CFC.
For example, cyber insurance customers who have had the product explained to them, understand it, and value it are more likely to continue buying it, Trueman says.
“The retention rates are phenomenal in cyber, so people who really do get it continue buying it,” he told Canadian Underwriter in an interview. “But what’s also happened then is, obviously those are the easiest people to sell cyber insurance.
“And so rather than grow the pot…we’re seeing a continued churn of existing clients. And that’s a shame.”
What can be done to address this customer churn?
The industry must articulate the value of the product better, as well as specifically tailor it to individual businesses and sectors, Trueman suggests. “I think as an industry, sometimes we build products and call them ‘solutions’ and we don’t necessarily do enough work on what is keeping [the client] awake at night.”
Discussion with clients about the value of a cyber policy should include the proactive services the cyber client receives. For the price of their premium, a customer is getting a well-tested, more-than-20-year-old product with cybersecurity and threat intelligence services.
“The beauty is, within the cyber insurance industry, it’s not the first time those experts are ready, so you’re getting that genuine expertise,” Trueman says. “What you get is hugely valuable. It’s about the cybersecurity knowledge that gets transferred. It’s about the support that goes with the product.”
Trueman understands why it can be difficult to sell the product, given its intangible nature. He uses the example of a building burning down, something everybody can imagine. “It’s much more difficult maybe to imagine what a cyber event looks like until it’s happened, or how it feels, and then to understand the value of the services that you’re buying.”
It’s about turning the intangible tangible, Trueman says. “Maybe we’re using phrases and words that resonate better with the client base…”
Another aspect is to consider adapting the cyber product to specific industries.
“Is it accurately adjusted to make sure, for instance, the oil and gas industry is getting a product that suits their needs — on the business interruption side, in particular, because obviously, they’re as vulnerable to… digital issues as anyone else?” Trueman asks. “Maybe the business interruption needs to be adjusted better.
“I think these are the processes to be going through.”
For Trueman, cyber remains the greatest missed opportunity in the market. Which means articulating the social value and proactive nature of the product is key.
“How do we make that feel simple when it is also so necessary?” Trueman asks. “I think the industry has to do a better job about that. We’re certainly challenging ourselves with that.”
Feature image by iStock.com/Urupong
