Vero, a specialist provider of business insurance and products to brokers, has released the results of its 10th annual Small, Medium, Business Enterprise survey.
1500 SMEs are surveyed by the company each year to understand the current business climate, insurance purchasing behaviour, and perceptions of brokers and the insurance industry.
This year is the second consecutive year in which broker use has increased, with 40% of SMEs stating they purchased their last policy through a broker, up from 35% in 2020.
The research also highlighted more than half of direct buyers are considering using a broker in the future, representing a revival of the broker value.
The Vero report attributes this trend to a ‘flight to trust’, with businesses remaining uncertain about the future ahead.
Twelve months on from the declaration of the pandemic, the report found 48% of SMEs say they feel optimistic but one in five is not confident about their business prospects for the year ahead.
Vero’s Head of Commercial Intermediaries, Anthony Pagano said it wasn’t surprising that the challenging economic conditions brought about by COVID-19 would influence confidence levels as Australia’s recovery continues.
“Businesses are operating in a fragile economic environment and many are facing issues not experienced before,” he said.
“There are new conversations to be had to ensure the cover reflects the exposures they are now under, such as implications to workers compensation and associated health and safety regulations, underinsurance for rising stock levels, marine transit covers for goods held up in ports or simply how to manage road risks with growing fleet operators.
“It is important brokers understand their clients’ situation, so they can have an open discussion about their insurance choices.”
According to the report, many SMEs left their insurance in place through the pandemic, around a third claimed to have made at least moderate reductions to their coverage, with larger SMEs, newer businesses and those industries which have been more negatively impacted by the pandemic more likely to have reduced cover.
A concerningly large group, 30%, did not even think about the risk of underinsurance when they reduced their cover.
Interestingly, direct buyers who reduced their insurance were more likely to consider using a broker in the future, suggesting that having to review their insurance may have highlighted the need for professional advice.
Mr Pagano said Insurance was a complex contract and needed to be properly understood to ensure it reflected the business needs and associated lifestyles.
The Vero report findings show that 51% of SMEs who have a collaborative relationship with their broker are highly satisfied, compared to only 24% of those who have minimal interaction with their broker.
Mr Pagano noted the shift in recent years with great service overtaking expert knowledge as the primary reason for working with their current broker.
“Relationships remain important to driving satisfaction and SMEs are continuing to seek proactive updates from their brokers over and above renewing policies and administration.”
Brokers also have an important role to play in claims, with 72% of broker clients satisfied with claims outcomes compared to 37% of clients with direct insurance.
To read the whole report follow the link below;
https://www.vero.com.au/broker/news-insights/sme-insurance-index/tenth-sme-ins-index-report.html
