Clients’ needs are changing
The 2022 SME Insurance Index has recorded the highest level of broker satisfaction rates in 5 years, with 87% of broker clients citing expertise as a reason to work with their broker. This suggests that SMEs have placed value in their brokers as they have looked after their needs during this challenging time.
Despite this increase in satisfaction, there has been a shift to purchase some covers direct. With 34% of SMEs citing they purchased their last insurance policy through a broker versus 66% direct. So why is this? It’s no surprise that many businesses have seen declines in revenue due to the impacts of COVID, and we now see an increase in the importance of finding cost effective insurance solutions with 74% of SMEs saying they would like to see their broker look for cost effective ways to insure their business.
Are SMEs seeing the whole picture?
With a focus on cost effective insurance, have SMEs been enticed to purchase more of their insurance direct? SMEs who attempt to cut costs when purchasing a policy may have failed to consider the impact at claims time and could therefore benefit from the advice of a broker. In fact, we continue to see claims satisfaction for broker clients at a higher level of 63% compared to those customers who have purchased direct at 42%.
There are multiple factors contributing to the increased satisfaction rates for clients who used brokers. Broker support and end-to-end claims management is highly valued by SMEs, as brokers understand this process and can support and advocate for their client.
68% of SMEs want support from their broker when dealing with a claim, this becomes more common the larger a SME gets.
“We like our brokers to be looking at the claims critically and assessing them… we certainly provide input, but we want them to be able to effectively manage it end to end for us, and that's where I think there value is.” Michael, Storage Company, Large business, Heavy broker user
SMEs ultimately evaluate whether they want to continue working with their current broker based on their claims experience. The claims process is highly influential in determining whether a broker will retain their client, with 10% of SMEs reporting they stopped using their broker following a claim, 22% started using a broker, 88% recommended a broker and 88% made changes to their insurance following a claim.
What changes do SMEs want to see from their brokers?
It’s important for brokers to demonstrate value at claims time to ensure they maintain their clients. SMEs don’t experience claims loss on a regular basis, so it presents an opportunity for brokers to ease their concerns, demonstrate expertise and confidence, and build trust through communication.
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Source: The SME Insurance Index report research was conducted by BrandMatters. See www.brandmatters.com.au
The information displayed is based on commissioned research involving 1,500 SME and 100 large business owners and decision-makers from around Australia. The research was conducted in October 2021. AAI Limited ABN 48 005 297 807 trading as Vero Insurance (Vero) has prepared this Vero SME Insurance Index Report (Report) for general information purposes only. Vero and its related bodies corporate do not assume or accept any liability whatsoever (including liability for special, indirect, consequential or incidental damages, or damages for loss of profits, revenue or loss of use) arising out of or relating to this Report or the information it contains. Vero and its related bodies corporate do not invite reliance upon or accept responsibility for the information it provides on or through this Report. Vero and its related bodies corporate do not give any guarantees, undertakings or warranties concerning the accuracy, reliability, completeness or currency of the information provided. This Report is not a recommendation or statement of opinion about whether a reader should acquire insurance from Vero (or its related bodies corporate) or services from any insurance intermediary or otherwise alter their business arrangements. This Report is based on commissioned research by Vero and should not be used as the basis for any decision in relation to the acquisition or disposal of insurance products or the use of broker services. Readers should confirm information and interpretation of information by seeking independent advice.
