Vero research reveals Covid related SME insurance gap

Small and medium-sized businesses might not have adequate insurance coverage after changing policies since the pandemic, according to a survey conducted by Vero.

Vero’s SME Insurance Index revealed that only 79% of broker SME clients have made changes to their business as a result of Covid-19. Only 23% have discussed changes with their broker, and only 10% have made adjustments to their policies.

Vero warned that there could be an insurance gap.

Chris Brophy, executive manager for business at Vero, said brokers had an opportunity to “reach out to their SME customers and provide additional value”.

He said many companies had made changes to their business models since the pandemic, requiring another look at their insurance arrangements.

“While for some business owners the changes made may be temporary, for others they reflect a ‘new normal’ which may mean their insurance is no longer providing the right cover.” “We can see that the pandemic has caused SMEs to make changes to both their business and insurance, but a large percentage of broker SME clients haven’t talked to their broker about the impacts on their business. This may mean many broker SME clients are missing out on the expertise and guidance of their broker at this important time.” He said brokers had the opportunity to “build trust and strengthen their relationship with SMEs, to see how each clients’ business has been impacted, and then provide advice to best suit their business needs”.

The survey also found that 23% of SMEs had to dive into their savings, get loans, or use retirement funds to stay afloat since Covid hit.

Meanwhile, economic, regulatory and legislative changes were the issues of greatest concern, with survey results showing the three most affected regions were Otago, Auckland and Waikato.