Insurance distribution platform BizCover – 40% of which was snapped up by AUB Group in February – is “extremely positive” moving forward despite there being still a way to go for the economy, with chief financial officer Simon Schwarz (pictured) saying they are continuing to see substantial growth not only through new businesses but also existing ones wanting to ensure they have adequate coverage at this time.
In fact, according to the CFO, BizCover enjoyed a 30% improvement in both enquiries and new business sales year on year. In terms of how these customers are paying for their insurance, Schwarz highlighted a switch from monthly instalments to upfront annual payments. He said the trend was the other way around prior to the coronavirus outbreak.
“When the pandemic hit in March and Australia went into national lockdown, we saw a big shift in a number of our key drivers,” the finance chief told Insurance Business. “From a new customer perspective, there was a 35% reduction in enquiries and sales, and a corresponding increase in cancellations to around 70% above our normal rate; renewals only seeing a small dip.
“Post-lockdown we are seeing some really positive trends, with renewals bouncing back to normal almost immediately and cancellation rates actually improving to rates that are even lower than pre-pandemic rates. There was a large proportion of customers who had cancelled, returning very quickly post-lockdown as well.”
At present, there are more than 140,000 businesses insured through the BizCover platform across Australia, New Zealand, and the US – with international expansion in the works. Also, the company is looking at rolling out improvements in areas such as automation, real-time payments, and self-service features, as well as introducing product developments and boosting its insurer line-up.
From the broker perspective, one main initiative this year has been the launch of quote-to-bind platform ExpressCover, which gives Austbrokers members access to a customised version of the BizCover for Brokers system.
Product-wise, meanwhile, there is one particular policy that is proving to be more popular than others.
Schwarz noted: “There is generally strong growth across all cover types, with a noticeable uptick in cyber insurance. Pre-COVID there was lower interest in this product; however, with the increase in cyberattacks during work-from-home situations, particularly around phishing, SMEs are becoming more aware of the need to protect their businesses.
“There are also occupation groups which are seeing much stronger growth. At the beginning of the pandemic we were seeing big growth around occupations like cleaners, handymen, and plumbers. Post-pandemic we continue to see strong growth in the cleaning sector but also around home-based businesses as well as trades related to home maintenance and home development.”
Additionally, the CFO pointed to a key long-term trend that he said started before the crisis and has now been fast-tracked – which is the migration to the online space not only for product research, but also for purchase of SME insurance policies.
“While we have unfortunately seen a large number of small businesses close their doors, those that continue to trade are learning how to trade under the new conditions and will push through,” asserted Schwarz. “The entrepreneurial spirit is also well and truly alive and there are plenty of Australians out there prepared to give it a go themselves and create their own opportunities.”