New research reveals ‘single most important factor’ for brokers in SME sector

New research reveals ‘single most important factor’ for brokers in SME sector | Insurance Business

New research reveals ‘single most important factor’ for brokers in SME sector
New research released by Vero has announced that a strong online presence is the “single most important factor to help brokers in their businesses,” with regards to the SME sector.

The 2015 Vero SME Insurance Index, released yesterday, shows that the insurance environment surrounding the SME sector is being greatly influenced by technology and brokers cannot afford to lag behind.

“According to the findings of this year’s Index, the single most important factor is having a strong online presence,” the report states.

“When those considering using a broker were asked how they would go about finding a broker, online search was the strongest source by far with 60% of considerers citing this.

“Recommendations came next, either from colleagues / friends / family (39%) or business advisors such as accountants (35%). Traditional methods such as Yellow Pages and advertising are considerably less influential, as is social media.”

Sam Sanfilippo, Suncorp Commercial’s national manager - broker distribution, warned brokers that if they fail to capitalise on all aspects of technology, they will see a marked decline in SME business.

“Brokerages need to consider investing in their online presence, not only through a strong website, but also using methods such as search engine optimisation to ensure they have a good presence when prospective clients turn to online search to find a broker,” Sanfilippo said.

“The evolving environment of how businesses want to obtain their insurance means that the insurance industry as a whole – and brokers in particular – need to adapt to new styles of interacting with customers.”

Younger business owners are more likely to conduct more online research of their insurance needs before using a broker and are more inclined to use the direct market, according to the research but it is not only Generation Y that needs to be considered.

“When asked how they purchased their last insurance policy, 44% of SMEs claim to have used a broker, down from 50% last year,” the report states.

“When these changes are examined in more detail, it can be seen that this decline is being driven by two groups – males and business owners over 40.

“In 2013, 54% of older male business owners and decision makers used brokers to buy their insurance. The proportion declined to 46% in 2014.

“These changes are especially significant given that males and the over 40s have traditionally been brokers’ strongest users. The decline in broker use amongst these groups coincides with some marked changes in attitudes and behaviours and, in particular, an increased tendency to become more involved in the process and to use the internet.”

However, all is not lost as 35% of 18 to 39-year-olds claim to have considered using a broker for their insurance needs – showing that the savvy broker is still in line for business from the evolving SME sector.

Vero also announced that they will release a number of tools throughout the year in a bid to aid brokers and their dealings with the SME market, starting with the release of an animated video which reinforces the benefits of using a broker in the SME sector.

Sanfilippo stressed that it isn’t all doom and gloom for brokers when it comes to the SME sector and one tried and trusted method of developing business shows no sign of stopping.

“At the end of the day, no matter what technology is used in the process, it always comes down to the expertise the broker brings to helping their customer. The Index indicates that the strong professional expertise that brokers bring is a key reason for looking for and using a broker.

“Expertise is a relevant message brokers should communicate to potential clients.”