How CFC is looking to tackle a small business insurance gap

Smaller businesses continue to face hurdles where it comes to accessing some commercial insurance products, a CFC senior leader at the business said as she shared how the MGA hopes to tackle this problem using tech.

“We recognized that there were significant barriers to entry for so many clients [to specialty commercial insurance],” Shannon Groeber, CFC USA CEO, told Insurance Business at the CFC Summit 2023 in Chicago.

With clients finding it tough to fill in detailed applications, brokers, according to Groeber, were, in some cases, “feeling very intimidated about how to talk about so many different products, so many different solutions – the natural tendency was to just to walk away from that conversation or not pursue it.”

CFC uses technology to scan for digital risks for its cyber insureds, tracking IP addresses and the IP addresses they are communicating with and scanning for vulnerabilities, event attendees heard during a session. The idea behind the latest update was to broaden this out and collect additional available data points, from permits and registrations to new products and partnerships, attendees were told. 

“[We realized] if we just expanded our scope, we could start to collect additional information; more things like risk for technology company, or for small professional service providers in the US,” Groeber said during a presentation.

The result, Groeber told Insurance Business, is that brokers can get more quotes in front of the US’s 33 million small businesses without having to request such detailed information. It’s a task that has previously proved a daunting chore for insureds and has ultimately acted as a dealbreaker that has led clients not to tap into cover.

“Oftentimes, there are a few employees, there might be a single business owner, and the applications ask a lot of questions that they might not necessarily have answers to, or that aren’t relevant for their business,” Groeber said of target businesses. “So we thought, if we can supplement that information, we can get information that we find valuable instead of asking them to bring it to us, then we can get more quotes to our brokers for their clients, and help them make that sale by giving them more detailed information.”

“Now brokers can do multiple product lines all at the same time – we’ve got technology, miscellaneous professional liability that they can quote at the same time and present together,” Groeber said. “Those products are ones that, for 20 years, as long as we’ve been talking about cyber, there’s been assumptions that some of that risk bleeds into E&O.

“It makes sense to put those coverages together with the same carrier and reduce the concern about which policy will respond.”

Further platform expansion is on the cards, with CFC’s full suite of management liability products to be added.

“[We want to focus] on these small businesses, single business owners, or some that have just a few employees, but actually tailor it to their specific concerns instead of talking about D&O [directors & officers] in the context of large public companies where those risks don’t translate, and therefore the products that are available don’t necessarily create that value,” Groeber said.

CFC is building out an additional insuring agreement in D&O that Groeber described as effectively replicating what it has done for cyber but looking at events specifically targeting senior executives.

“They can have personal protection, they can know that if they are specifically harmed from a reputational standpoint, or if there’s misinformation on a website, we will help them remove that information, repair their reputation, and get them back to a level pre cyber events,” Groeber said. “And if they experience any sort of personal financial loss as a result of that cyber event, we will cover that as well.”

How are you serving your stretched small business clients? Let us know in the comments.