We do indeed live in interesting times. Whether that’s a blessing or a curse depends on your outlook, but there’s little question that businesses and consumers alike are navigating a challenging new normal.
Insurance carriers and agents operating in the nonstandard auto market are no stranger to overcoming unique business challenges. At Verisk Velocity, executives working in this market recently joined us in an engaging panel to discuss some of the key strategies that have helped position them for success in the specialty auto insurance market.
Think locally, act locally
While specialty carriers aren’t always insulated from national trends, they don’t necessarily follow the national pattern. Take COVID-19. While the start of the pandemic and ensuing lockdowns, for example, lead to a sharp drop in mileage nationally, some specialty/nonstandard auto carriers observed a more modest decline since a larger portion of their customer base consists of essential or gig economy workers who were still on the roads, commuting or making deliveries.
Knowledge of the local customer base and local trends is therefore a critical ingredient for success in this dynamic market. Leveraging unique data sets, underwriting solutions, and a creative mentality can help carriers identify prospects and segment them appropriately.
Capitalize on an innovative and entrepreneurial mindset
A higher rate of customer churn and generally shorter policy durations typically means that carriers working in this market often have incomplete information. Rather than be paralyzed by that fact, successful carriers and MGAs learn to operate and thrive by innovating and learning quickly from mistakes. It often requires an entrepreneurial mindset and flatter organizational structure that can greenlight projects and iterate technologies at a faster clip. In fact, innovative technology can be a strategic differentiator for those working in the nonstandard market, enabling carriers to offer mobile payment and claims portals to customers who may do their primary computing through a mobile device. Nonstandard auto carriers show their strength at making the most of imperfect information and honing in on their innovative and entrepreneurial spirit.
Value incremental progress
Whether it’s technology solutions or business growth, incremental improvements propel success. In baseball terms, you’re aiming for singles and bunts, not swinging wildly for grand slams. It’s an accumulation of small wins that can position specialty carriers for sustained success.
To discover more strategies for success and to learn about some of the trends shaping the nonstandard and specialty auto markets, please check out the Verisk Velocity session on-demand.