Start-up success secrets

• Publisher: John Wiley and Sons
• Year: 1998
• Tongue: English
• Weight: 320 KB
• Volume: 14
• Category: Article
• ISSN: 8756-6079
• DOI: 10.1002/bir.3820140603

✦ Synopsis

Selling to small business

Schrempf sees another opportunity for banks in selling insurance to small business customers.

"When I talk about small businesses here," Schrempf illustrated, "I'm talking about ones in the sort of 50 to 100 employee range. Large commercial accounts are outside of this sphere; negotiated commissions there eliminate a lot of the advantages for banks. But the small commercial market is served today by a very high cost distribution method: agents. And maybe it's a much more attractive economic proposition for banks to serve this market than for agents and insurers to do so. Because you already have multiple connections and relationships with small business customers that you can leverage."

Like life insurance, you must customize property/ casualty products for specific market segments.

"The bottom line," he continued, "is that small businesses represent about 40 percent of the employment in the market today, all of the job growth, and they are under served in the marketplace -because they're not especially attractive to agents. That makes them a potential opportunity for you. They are also pretty price sensitive, so the right value proposition is going to be critical. But banks could have lot of advantages in this market."

Schrempf then discussed the obstacles banks will face. "On the other side, this is a much more complex segment," Schrempf noted. "You've got multiple locations