Small Business Blog
Digital Agencies Seek to Streamline Small-Business Coverage
July 2, 2018
More workers’ comp policies may soon be sold without the involvement of a human broker, as a Nevada-based startup is offering commercial policies via the internet to small businesses in 44 states.
The company is called Talage, which combines a piece of the words “digital” and “agency,” said co-founder and Chief Executive Officer Adam Kiefer.
Talage has partnered with eight insurance carriers: Employers, Travelers, CNA, ICW, Chubb, Acuity, Markel and Atlas General.
All but one of the carriers are offering work comp policies through the Talage platform. The exception is Chubb, which is expected to add workers’ compensation to its Talage offerings in the coming months. Commercial property and liability coverage are also available through Talage.
Like Talage, monoline workers’ comp carrier Employers is also based in Reno, Nevada. Their partnership is no coincidence.
Kiefer worked for about three years as a sales manager and territory manager at Employers, and saw what he described as “inefficiencies in how insurance is sold today.”
Employers has been an early supporter of Talage and was instrumental in developing the early product, he said.
Employers’ focus is small businesses in low- to medium-hazard industries.
Kiefer said the Talage platform was built “backward” from the carriers' perspective, as a distribution option that optimizes their underwriting preferences. The platform streamlines their ability to sell small-business insurance while their traditional agency channel focuses on mid-market.
Talage faces competition from more established digital insurance agencies such as Insureon, Cover Wallet and Coverhound, which offer workers’ comp policies along with other types of commercial coverage. Coverhound also offers personal lines.
Several of the same workers’ comp carriers working with Talage also partnered with other digital agencies. In addition to the digital agencies, which offer access to policies from a selection of carriers, a few carriers including Cake, Pie and Berkshire Hathaway’s biBerk are selling policies directly to businesses online.
Small-business policies are an attractive market for the digital agencies, said Michael Fitzgerald, a senior analyst with information technology consulting firm Celent. Small-business owners, typically busy multitaskers, welcome the convenience of buying insurance online, he said.
“It really fits well with small commercial,” Fitzgerald said. “Customers want to buy in a variety of ways: any time, anywhere.”
The digital agencies have been successful thus far at attracting investors, Fitzgerald said. How many policies they’re actually selling is more difficult to tell, he said, since the agencies aren’t subject to the same reporting requirements as carriers.
Carriers for the most part don’t have anything to lose by selling through the digital agencies, Fitzgerald said, as long as the agencies have data protections in place and are projecting a message that won’t hurt the carrier’s reputation. And technology is becoming more sophisticated at finding a good fit between clients and insurers, he added.
Is all of this making traditional brokers nervous?
“Not in a big way that I know about,” Fitzgerald said.
In an interview with Insurance Business last year, Insureon CEO Ted Devine said human agents and brokers are the dominant channel for small commercial policies and will still have jobs for years to come. In fact, he said, digital agencies and traditional brokers can work together, referring clients when the other has a better solution.
Talage was initially launched in California, Nevada and Arizona, and has been selling policies since last year. The company is now selling policies in 44 states and expects to be in all 50 states this summer. Talage makes its money through commissions from carriers when a policy is sold.
The company’s geographic expansion is getting a boost from a $1.5 million round of funding led by Merus Capital, with participation from WTI, BattleBorn Ventures, Acceleprise and Hallador Investments. Talage also plans to increase its product offerings to include general liability and business owners' policies.
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