How to help increasingly risk averse businesses with the right risk guidance
During uncertain times, businesses look to their insurance brokers to help them manage risk. They’re after real clarity on their risk exposures and how they can reduce the likelihood of business interruptions. Put simply, businesses need to understand the risks they face so they can take steps to reduce the likelihood of these risks from occurring.
As part of the Vero 2024 SME Insurance Index research, 1,750 business owners and business insurance decision-makers across the country were surveyed about their attitudes, needs and behaviours towards insurance and brokers. The results are overwhelmingly positive and we analyse the report in this article.
Looking at the specific tasks that brokers are undertaking for clients gives us insight into what is driving this growth in satisfaction. The 4th most influential task being brokers providing recommendations to how businesses may reduce/mitigate risk.
2024 SME Insurance Index Report: Influence of tasks on satisfaction (driver analysis)
The Index Report highlights the importance of having a broker with real insights to help SMEs navigate and mitigate risk. Risk mitigation tasks are highly relevant to most businesses, and therefore brokers can feel confident that their clients are interested in hearing more from them in this area. For instance, 81% of businesses stated they are interested in ways to decrease risks so they can reduce costs and 72% agreed that they like to receive explanations of the coverage/risks before they make their insurance decisions.
2024 SME Insurance Index Report: Risk-related insurance statements
In a similar vein, most businesses say it is important for their broker to undertake risk-related tasks. For example, 76% of businesses reported that their broker actively assists in managing potential risks and 78% would like to see information on emerging risks they may face.
2024 SME Insurance Index Report: Importance of risk-related tasks
Respondents were asked how likely it is that their business could be impacted by a range of potential risks. Businesses appear to be relatively pessimistic, with large numbers expecting to be impacted by some sort of risk event. The data uncovered a gap between confidence and coverage: 4 in 5 businesses said they feel confident about their ability to ‘manage equipment breakdown and being unable to trade for a lengthy period’, and yet we feel the amount of businesses who take out these types of optional covers is low.
The research reveals 16% of those surveyed say that they haven’t discussed any risks with their broker, highlighting a gap in helping businesses gain a clear picture of the risks that they face. There appears to be a correlation between not discussing risks with brokers and overall satisfaction - 20% of those who haven’t discussed any risks with their broker are neutral or dissatisfied with their broker, compared to only 12% of those who have discussed risks with their broker.
2024 SME Insurance Index Report: Broker satisfaction by whether risk(s) was discussed with broker
Hear from Rich Fenton, Executive Manager of Risk Engineering at Vero on how you can add value to your clients, “It is important for brokers to assist their customers with risk mitigation. We know from the research that customers are looking for this information... and it affords brokers the opportunity to demonstrate how they can add so much more value to those customers and make them stickier in terms of retention.”
Vero has a large number of downloadable Risk Management Insight articles that brokers can use to assist their clients on a wide variety of topics. There are also a number of checklists that brokers can either use themselves or pass on to clients for self-completion. These may prompt reviews of procedures or controls in place to mitigate risks.
Vero has produced industry risk guides for a number of industries, including a series of Property Insurance guides written for brokers on understanding and reporting on COPE (Construction, Occupancy, Protection and Exposure).
You can access the Vero risk management insights library to help provide risk insights to your clients.
Discover all the findings by downloading the Vero 2024 SME Insurance Index report and/or watching the webinar on demand.
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