Most business owners don’t spend much time thinking about insurance until something happens.
I don’t blame them.
If you’re running a business, you probably have customers to deal with, employees who need something, invoices that haven’t been paid yet and about 15 other things competing for your attention before lunch.
Then once a year somebody tells you it’s time to review your insurance.
That’s usually when the fun begins.
You start hearing terms like exclusions, coinsurance, underwriting, prior authorization, replacement cost and network adequacy. Depending on the type of insurance, you may be comparing several companies that appear to sell basically the same thing.
They aren’t always selling the same thing.
That’s where I think the insurance industry has a problem.
There is more information available to consumers than at any point in history. Finding information is easy.
Figuring out what actually matters has become harder.
More Choices Don’t Always Make Things Easier
The internet was supposed to simplify insurance.
In some ways it absolutely has.
A business owner can get quotes online. Consumers can research companies before talking to anyone. Policy documents are available electronically. You can compare benefits without driving across town to sit in somebody’s office.
All good things.
But something strange happened along the way.
We gave consumers access to more information without necessarily giving them a better way to understand it.
Price is a good example.
Everybody understands price.
If Company A wants $8,000 and Company B wants $6,500, the second option looks better.
Maybe it is.
But what happens if Company B has a much tighter underwriting appetite? What if the property policy has a different roof settlement provision? Maybe one health plan has a substantially weaker provider network in the area where most of your employees live.
The cheaper policy can become expensive pretty quickly when you discover the difference after a claim.
I’ve seen versions of this throughout the insurance business.
The problem isn’t necessarily that consumers don’t have enough information.
Sometimes they have too much of it and no good way to separate what matters from what doesn’t.
Insurance Is Becoming More Complicated At The Same Time Technology Is Making It Easier To Buy
Buying insurance is getting easier. But that doesn’t necessarily mean that understanding it is. Together, that can be a recipe for disaster.
Healthcare is probably the easiest example.
A small business owner shopping employee health coverage isn’t simply comparing monthly premiums anymore. Networks matter. Prescription drug formularies matter. Deductibles are only part of the out-of-pocket exposure.
The same thing happens when people reach Medicare.
A Medicare beneficiary can have dozens of Medicare Advantage options available in one county. Then you add Medicare Supplement plans and prescription drug coverage.
Someone can technically compare all of this online.
That doesn’t mean they know what they should do.
This is one reason I still believe a good independent insurance broker has value even as more of the insurance transaction moves online.
The agent shouldn’t exist because the consumer can’t access the information.
That argument is disappearing.
But, the agent should exist because he or she can interpret it.
The Insurance Market Itself Keeps Moving
Here’s another part consumers don’t always see.
Insurance companies change their appetite.
A carrier that aggressively wanted a certain type of business two years ago may barely want it today.
We have seen this in homeowners insurance. We see it in commercial insurance. Medicare Advantage carriers enter counties, change benefits and sometimes leave markets altogether.
That creates a problem with a lot of the information people find online.
It’s technically correct but already old.
I can read a five-year-old article telling me that a particular company is a great fit for a certain risk. That doesn’t mean the carrier wants that risk today.
This is why current market information is becoming so valuable.
There are now insurance market intelligence tools that track things such as rate pressure, underwriting changes and market penetration. The interesting part isn’t simply having another database. It’s being able to see where the market is moving before that movement becomes obvious.
Recent research on the changing independent insurance agent points to the same problem: technology is making information easier to access while making an agent’s ability to interpret that information more important.
Business owners should think about their own insurance the same way.
Don’t just ask what a carrier offers.
Ask what has changed.
AI Isn’t Going To Fix All Of This Either
AI is going to make a lot of the grunt work in insurance faster. I already use it in my own business for that reason. It can chew through a policy and spit out a summary in seconds. Stuff that used to eat up half an afternoon now takes a couple of minutes.
But here’s the part that still worries me.
If the information going in is old, incomplete, or missing the real context of what’s happening in the market right now, you just get a clean, confident answer that’s wrong. And because it sounds so polished, it’s easy to trust it when you shouldn’t.
I’ve seen versions of this already. The tool is only as good as what you feed it. Garbage in still equals garbage out — it just arrives faster and looks more professional.
Business Owners Should Ask Better Questions
When insurance renewal comes around, most business owners understandably start with:
How much did my premium go up?
Keep asking that question.
Just don’t stop there.
Ask whether the market has changed. Find out whether your insurer’s appetite for your type of business is different than it was last year. Look at what changed in the policy instead of assuming renewal means everything stayed the same except the price.
And when you’re comparing alternatives, don’t automatically assume the cheapest quote won.
Sometimes it did.
Sometimes it didn’t.
Insurance is one of the few things we buy hoping we never have to use. That makes it easy to treat the policy itself like a commodity.
It isn’t one.
Information Is Cheap. Knowing What To Do With It Isn’t.
I think this is where insurance is heading.
Consumers will have more access to quotes and policy information. AI will make comparisons easier. Insurance companies will continue building systems that let people buy coverage with less human involvement.
That’s coming whether agents like it or not.
I’m fine with it.
The part I don’t think technology eliminates so easily is judgment.
A business owner doesn’t really need somebody to read a premium off a computer screen anymore.
They need somebody who can look at the premium, coverage, underwriting environment and what is happening in the market and say, “Here’s the part I would pay attention to.”
Because in a world where everybody has access to information, simply having the information isn’t worth very much anymore.
Knowing what to do with it is.
