The COVID-19 pandemic has continued to take an economic toll on American small businesses. Those that have the resources to adapt will be better able to weather the storm and return to profitability, according to a recent Leader’s Edge article.
In spring of 2020, nearly nine out of 10 small businesses experienced a moderate to large negative impact due to the pandemic, according to the U.S. Census Bureau. Additionally, more than 40 million unemployment claims were filed through late May, according to the Labor Department. Job losses came as small businesses struggled to save money to survive. It is estimated that 42% of those preliminary layoffs will remain permanent.
While most small businesses struggled, others, like janitorial services and information technology businesses, saw a spike in business. For insurtechs (like Pie Insurance) that serve small businesses, the COVID-19 crisis both posed a challenge and also highlighted a built-in advantage. Pie’s business model functions online and is naturally socially distant.
“In general, we’re seeing reductions in payroll across the board,” John Swigart, co-founder and CEO of Pie Insurance, explained in the July 2020 article. “What that does, effectively, is reduce their cost immediately for their workers’ compensation insurance.”
During the pandemic’s peak, Pie’s customer success teams proactively reached out to customers to 1) update their policies to reflect the new payroll reductions, 2) set up payment plans and payment leniency when necessary, and 3) arrange good-faith deposits to help small businesses prevent their policies from lapsing.
“The people that come out of the other side are largely going to be driven by those that have the capital resources to do so, and then we’ll be back to what business models are really the enduring business models to build value over time,” says Swigart. “Our value proposition still really resonates. We create an easier experience for the customers and for the agents.”
Defining the new normal for small businesses will continue to be an uphill battle, but insurtechs like Pie are committed to adapting—and helping their small business customers do the same.
Read the full article from Leaders’ Edge.
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