Avoid the wrong opportunities while seizing the right ones
A large national insurance company was advised not to pursue a market segment that was popular with some of its top agents.
Situation
Are we overlooking an important market opportunity?
A large national insurance company with multiple product lines was in the process of evaluating its distribution options. A number of its top-producing agents had experienced significant success in the small business segment and began pushing senior management to consider this market. While small businesses had not historically been considered a priority, management questioned if there was sufficient opportunity to make this segment a strategic focus.
Solution
A multi-dimensional approach to analyzing opportunity.
To analyze the prospective opportunity, Carpenter Group’s business consultant looked at the small business segment from a variety of different angles. This included leveraging the experiences of field agents, quantifying the potential opportunity, and considering innovative ways to deliver products. While extensive field work uncovered that the multi-year value of small business sales from successful agents was quite attractive, it reflected a relatively narrow product focus. This led to a broader review of the opportunity to sell individual insurance and investment products to business owners and their employees. While the analysis revealed a substantial opportunity within the small business segment, it also raised a number of red flags that would influence the company’s ultimate decision. These included the lack of suitable group and retirement products, which are necessary to be successful in this segment. The company would have to expand its offering or adopt a true open-architecture—neither of which fit into the firm’s long-term strategic plans. Furthermore, an increased emphasis on investment products raised major concerns, at a time when the company was focused on increasing sales of existing insurance products. In the case of this company, the research and analysis supported a “no-go” answer.
