US-based insurance giant Travelers has announced the purchase of commercial broker Simply Business, with the move spurred by its attractive business model and potential to expand its geographical reach.
Commercial broker Simply Business has been acquired by Travelers from private equity house Aquiline for $490m (£403m), with the deal expected to close by autumn 2017. Travelers’ stated aim is to use the acquisition to facilitate growth in the US microbusiness market and other international locations, as Simply Business has more than 425,000 microbusiness customers covering over 1,000 classes of business.
But the broker’s operating model was also a key factor behind the deal. According to Travelers, technology and round-the-clock servicing are the most prominent driving forces behind customer preferences and expectations. Therefore, advancement of the group’s digital agenda and improvement of its attendance to customer queries are among its key strategic priorities.
Simply Business is currently at the forefront of customer service and operational efficiency in the marketplace. The broker sells insurance online to small businesses, and placed £93m of GWP in 2016. According to Travelers, the broker recorded a compound annual growth rate of 17.5% over the past three years, with its ability to provide quick and easy small commercial insurance transactions one of the qualities driving its success. Travelers aims to deploy the key features of Simply Business’ operating model across its entire business, and other providers could take note and adapt some of its proficiencies.
Simply Business is essentially a direct proposition for commercial insurance. The group’s platform not only contains a vast product range suitable for various business types and sizes, but also an expedient quote-and-buy process. The broker’s Knowledge Centre offers tailor-made guides to how its customer base can improve their general operations, from marketing assistance to engaging with social media, acting as a one-stop-shop for small businesses in-search of additional advice around their day-to-day functioning. Simply Business also maintains a help and support center with extended opening hours to help with the resolution of claims and other customer issues.
Evidently, the broker’s business model is its prized feature. Simply Business’ ability to accommodate its customers sets it apart from most other intermediaries in the commercial space, most of which have a more traditional operation with an individual broker as the first port of call. Technology and efficiency are important to offering a best-in-class service to the modern customer, and the Simply Business blueprint could, and should, be transferred to more areas of the insurance sector, including the provision of other complicated products such as life cover and even pensions.
By Thomas McCourtie, General Insurance Analyst