Vero has released its 2021 SME Insurance Index to the market
Vero has released its 2021 SME Insurance Index to the market, that explores the attitudes, behaviours and expectations of SMEs when it comes to broker usage and the insurance industry.
This year’s findings reveal that many Australian Small and Medium Enterprises (SMEs) have lowered confidence levels but brokers outlook is positive; relationships continue to drive satisfaction and underinsurance poses a risk for those that reduced their cover during the pandemic.
Vero Head of Commercial Intermediaries, Anthony Pagano said it wasn’t surprising that the various challenges triggered by COVID-19 had influenced business confidence, but it presented an opportunity for brokers to add value.
“Whether your client is feeling confident or not, businesses are operating in a fragile economic environment and many are facing issues not experienced before, like problems with stock availability, the movement of their goods, changes in their business operations and complications in recruiting and training staff.
“It is important brokers understand their clients’ situation, so they can have an open discussion about their insurance choices.”
The Index revealed early signs of increasing broker usage, suggesting potential reversal of the declining trend seen in previous years, with 40 per cent of SMEs stating they purchased their last policy through a broker, up from 35 per cent in 2020.
The research also highlighted more than half of direct buyers are considering using a broker in the future, continuing an increasing trend over the last few years.
“We could be seeing a ‘flight to trust’ as SMEs look for additional support for their insurance needs, giving brokers an opening to demonstrate their benefits as risk and insurance advisors, providing valuable guidance throughout the process.
“Brokers can encourage those direct SMEs with complicated insurance needs to make the switch, by helping them feel more informed and supported end-to-end,” he said.
Pagano noted the shift in recent years with great service overtaking expert knowledge as the primary reason for working with their current broker.
“Relationships remain important to driving satisfaction and SMEs are continuing to seek proactive updates from their brokers over and above renewing policies and administration.
“Great service in tandem with specialised expertise will go a long way in reassuring SMEs in this tough environment - they want brokers proactively checking up on business changes that could impact their insurance needs, outlining the reasoning behind their recommendations, providing alternative and cost-effective options as well as educating clients on insurance industry issues such as natural catastrophes and emerging claim trends.
“SMEs have changed, be it through their adoption of broker usage, understanding of insurance implications and purchasing behaviours. So, insurers and brokers alike must continue to evolve to keep up. It’s certainly a challenging time, but I think there’s plenty for us to be excited about.”