Just 17% of New Zealand small and medium-sized enterprise (SMEs) business owners and decision makers have income protection insurance, it has been revealed.
According to Asteron Life, in its latest SME Insurance Index, SMEs represent 97% of all New Zealand businesses and 61% of them have life cover. However, their uptake of other personal insurance products is considerably lower.
“The uptake of personal insurance products shows there is a significant opportunity to talk to SMEs about covers like income protection insurance, particularly in the context of their business ownership and how that might affect their cover,” Asteron Life acting executive manager, life distribution, Trevor Longbottom said.
Asteron Life noted that the research is the “first step towards helping advisers understand the unique challenges faced by SMEs, and identify ways to tailor their offering towards them.”
The study shows 52% of SMEs with life insurance said they used an adviser because it simply saved them time; 36% stated they are trying to do everything on their own; 31% said they have no time for themselves or their family; and 26% identified managing their time as a major challenge. The research suggests there is considerable appeal in having one adviser look after all of their policies.
When it comes to getting life insurance, the research reveals that expertise (86%) and service (70%) are the top reasons why SMEs use an adviser. Interestingly, price was a lower consideration with only 45% saying they used an adviser due to price and only 49% thinking getting the cheapest policies was important.
Moreover, 96% of customers with life insurance thought being insured gave them peace of mind.
Asteron Life also identified other ways advisers may be able to demonstrate value for SME customers. These include: