Despite the daily headlines, Brexit is being largely ignored by SMEs who are focused on more immediate concerns including cyber and the General Data Protection Regulation (GDPR), reveals Zurich.
That means brokers may have a task on their hands in keeping clients educated as to the full spectrum of risks they are facing – but the good news is SMEs are finally waking up to cyber.
Two in five insurance brokers say they are providing regular counsel to clients on cyber risk, while just one in 10 are asked about Brexit, Zurich’s latest broker survey found.
“There’s an old saying about dealing with the closest crocodile to the canoe, and I think in terms of Brexit and timings, looking at March 2019 it is still further away, whereas some of the other real issues affecting SMEs are current trading conditions, GDPR, and the growing risk of cyber,” Paul Tombs, head of SME proposition at Zurich, told Insurance Business.
“I think those are risks that are here now, and are taking priority and dominating more of the discussions,” he said.
Amid the tumult of the last few years, there are a number of major risk areas that UK businesses have been struggling to find the time and resources to address, according to Tombs. As a result, brokers need to take the lead in making sure their SME clients are looking at their exposures.
“From a Brexit perspective, it’s important to be having those conversations,” he said. “Clearly there is a lot of uncertainty, but there are things that can be looked at now to try and reduce some of that uncertainty – such as issues around supply chain and the business continuity perspective.”
When it comes to cyber however, SME interest is growing. Brokers just need to ensure that they are tailoring their advice.
“There are absolutely growth opportunities for brokers, and I think that’s because there’s a real demand and a need for the cover from the end-client base,” Tombs said.
SMEs, alongside their larger counterparts, are growing more heavily-reliant on technology and data. The stakes are also higher than ever when it comes to cybersecurity failings.
“The impact of getting it wrong on their reputation has increased significantly. If something does go wrong, it can now spread a lot quicker than it has ever done in the past,” Tombs said.
But both brokers and insurers must focus on tailoring their offerings to SMEs, who have different cyber needs than large corporates.
“I think the important piece here is really understanding what the end-client needs as part of this. From an overall proposition perspective, you need to understand it from having the right product, the right pricing structure, and making sure it is relevant for those smaller SME customers, compared to larger customers,” Tombs said.
“That’s where both insurers have to get it right in understanding the customer need, but also brokers have to get it right in terms of making sure that they’re giving the right advice and recommending the right products,” he went on to say.
As well as advising on insurance, brokers should be assisting their SME clients in mitigating the risks pre-loss.
“It’s about looking at it from a holistic perspective, and looking at what can be done from a technology, people and processes perspective,” Tombs said.
“I think the key message for brokers is to continue to talk to their clients and educate them on the risks that they face now, but also the emerging risks,” he continued. “It’s about risk assessment, advice, understanding SMEs’ needs and putting the right cover in place. That’s the key role of a broker. They need to continue to do that amid continued levels of uncertainty.”