NOVEMBER ISSUE 4.03
INSURANCE BUSINESS UK AND BRAVO GROUP PRESENT…
THE UK SME INSURANCE REPORT
Learning from broker specialists and taking the insurer-broker relationship to new heights
SPECIAL REPORT
CYBER
GROUP
BOOST YOUR BUSINESS. HARNESS THE POWER OF A NETWORK AND GALVANISE GROWTH IN 2020
THE POWER OF THREE GROWING, PROTECTING, SUPPORTING YOUR BUSINESS
THE POWER OF PARTNERSHIPS LONDON MARKETS | MEMBERS | PARTNER INSURERS
Adam Lee | Head of New Sales adam.lee@brokernetwork.co.uk
Simon England | BDM − North simon_england@compassuk.co.uk
Alexa Owen | Network Sales Executive alexa.owen@brokernetwork.co.uk
Aaron Bunyan | BDM − South aaron_bunyan@compassuk.co.uk
SPECIAL REPORT
UK SME INSURANCE REPORT
FOREWORD PAUL LUCAS Managing editor of Insurance Business SME MAY STAND for small-to-medium enterprise, but in the world of insurance the opportunity that these businesses present to brokers and insurers alike is anything but ‘small-to-medium’ – on the contrary, insurance for SMEs is big business. According to statistics released by Parliament.uk, there has been a 63% increase in the number of businesses in the UK since the year 2000 – and by 2018 there were 5.7 million SMEs in the UK, representing 99% of all businesses. Each business is likely to have its own unique insurance needs – something that brokers can capitalise on with tailored propositions. For while the individual consumer may have taken, in many cases, to trawling through comparison websites and grabbing cheap quotes for their insurance needs, business owners can rarely afford to take such risks – they rely on advice from genuine experts because one unpaid claim could potentially leave them bankrupt. Yet despite the obvious need for brokerrecommended insurance products, statistics suggest that there can be no room for complacency in attracting SME business. In 2016, on the back of four years of growth, the SME insurance market witnessed a sharp decline according to a study by Research and Markets – it showed that gross written premiums fell by 9% to £6.4 billion while SMEs spent 22.7% less on insurance. The report suggested that economic growth and uncertainty over Brexit may have stoked the decline as SMEs spent less on insurance, fewer businesses opened, and liquidations increased. The market suffered, in particular, from a drop in the number of companies with five to nine employees. “The number of companies in this size
category fell by 4.1%, which is considerable as there are a large number of them and they have a high insurance penetration rate,” said the report. There was concern too over the rising threats of cyberattacks – while insurers were introducing more policies, penetration was declining. “A lack of specialist cyber knowledge and too much focus on pricing are seen as the main issues within the industry,” it said. “It is also believed than many SMEs are taking the optimistic view that a cyberattack will not happen to them, so the insurers need to convince them of the benefits of insurance.” Thankfully, the stagnant SME insurance market didn’t last long – by the following year it had grown again, according to the Global Data report UK SME Insurance Market: Market Dynamics and Opportunities 2018, which reported a 1.4% increase in the market to £7.8 billion. However, fast forward to the end of 2019 and the risks of 2016 still seem to loom large. Brexit uncertainty still hangs over the UK, cyberattacks continue to be greeted by many with an “it won’t happen
to me” mentality, while liquidations and bankruptcies continue to rise – according to Gov.uk there were 27,683 debt relief orders (DROs) in 2018, an 11.7% increase on the prior year; while bankruptcy orders jumped 9.8% year-over-year to 16,582.
What do SMEs want from their insurance? According to an RSA survey in 2017, business owners’ buying decisions are largely dictated by price – named as a top three factor by 61% of its survey’s respondents. Perhaps more worryingly, by comparison, just 38% of SMEs ranked scope of cover as a top deciding factor. There was some encouraging news for brokers in the survey, however, with 58% of businesses listing either customer service or understanding the client’s business as top three influencers, highlighting the crucial role brokers play in the process as well as the need for insurers and brokers to strike a balance between price and service. Amid such a challenging climate, the key for brokers is to serve up offerings that genuinely match the appetite of their SME clients.
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UK SME INSURANCE REPORT Getting the balance right There is a significant market opportunity for brokers in the SME space – but it’s absolutely crucial they get their offerings right. Specialist knowledge is crucial. They need to know their clients’ businesses inside and out and offer much more than just an ‘insurance quotation service’ – instead helping their clients to proactively anticipate and mitigate risks. There is a need too, to strike relationships with insurers that go above and beyond offering basic cover, and instead offer valueadded services such as disaster recovery, cyber support and legal helplines. By offering customers services that they could not afford to pay for elsewhere, brokers can stand out in the market and provide the sort of business value that will not only attract SME business but retain it for years to come.
Putting the power in your hands To help the broker cause, Insurance Business has teamed up with Bravo Group, the collaborative group of businesses that includes Compass, Broker Network and Ethos Broking, to put together a report for insurers and brokers that addresses some of the common questions around the sector including: • What value do SMEs offer to insurance brokers? • Where do the opportunities lie within the SME segment? • How can brokers appeal to new types of SME business? • What value can insurers bring to regional SME brokers? • And how can insurers break down the barriers to trading with SME brokers? It is hoped that by seeking insight from brokers who have already built up successful books of SME business, alongside that of insurers who have established specialisms within the sector, all facets of the industry can come together to offer a proposition that not only helps SMEs ride the storms of the present day environment, but that sets them up to thrive for years to come.
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WHO’S ON OUR PANEL? DES O’CONNOR CEO, Bravo Group DES held the position of chief commercial officer at Brightside Group before joining Broker Network in 2016. Prior to that, he was MD of Gallagher Insurance Solutions for three years, part of Gallagher Heath, having been MD of the binding authority and facilities division at Gallagher London from 2006 to 2011. In December 2018, Des moved into the Group CEO role, overseeing all three businesses within the Bravo Group.
LENA WEAIRE managing director, Knighthood Corporate Assurance Services LENA has worked in insurance for 33 years, with the last 26 years spent at Knighthood. Now managing director, she is passionate about promoting the specialist nature of Knighthood’s business. Knighthood specialises in the marine sector.
CHRIS CHAPMAN director, WRS Insurance CHRIS is the owner and managing director of WRS Insurance Brokers Limited. Chris works closely with the charity and faith sector and is actively involved in a town centre Church ministry and community projects.
BARRY FEHLER founder, SEIB South Essex Insurance Brokers was already established when Barry created the first dedicated horse insurance policy having discovered that no other insurance company was able to offer this type of cover. From that
the company was able to then specialise in many types of equestrian insurance in addition to the other insurances that they now provide for private hire, funeral directors and more.
AMIT PATEL managing director, Anami Agencies Anami Agencies is a family run business that has been serving the London area for over 30 years. Amit Patel has been working in the insurance industry since he was a child and is a strong believer that the knowledge he has gained through Broker Network has helped him to grow the business.
NEIL HARLE director, Essex Insurance Brokers Essex Insurance Brokers has served its local community since 1964. The brokerage covers personal and commercial lines, and specialises in film and media insurance with clients throughout the UK.
KEVIN COBBLEDICK commercial insurance director, Together Insurance Solutions KEVIN has built up considerable insurance knowledge during his career of more than 20 years by taking on a wide range of roles within local brokerages and larger corporate companies.
RICHARD LOVEGROVE managing director, Stride Group RICHARD LOVEGROVE is managing director of Stride Limited. Stride is based in Hampshire
and employs 50 staff specialising in property insurance via Stride brands. The company has been established for 46 years and wholesales property owner insurance solutions to over 400 brokers in the UK via binding authorities with Allianz, Zurich, Hiscox, Aviva, Arch, AXA and their own MGA Portus Underwriting with capacity from AXIS Capital.
STEPHEN TAYLOR head of SME and corporate partner distribution, Allianz Insurance STEPHEN has responsibility for both the Maidstone and Lancaster SME branches. Having joined Allianz in 2011, Stephen most recently held the position of regional operations manager in London, having previously taken on roles across technical and distribution.
DEEPAK SONI director of commercial intermediary, AXA Insurance DEEPAK SONI has over 15 years of experience in the insurance industry. He started his career with a broker, Aon, before moving to the insurer side for Hiscox. In 2015, he joined AXA, where he is director of commercial intermediary.
LEE MOONEY UK Regions managing director, RSA Commercial Lines With over 20 years of insurance industry experience, Lee is responsible for the commercial regional business across RSA’s trading locations across the UK including the Isle of Man and Channel Islands. He is a board director of Tower Insurance and has spent his career at RSA across a variety of areas including underwriting, sales, strategy, leadership and regions.
QUESTION 1
What value do SMEs offer to insurance brokers? DES O’CONNOR, Bravo Group When SME businesses win, brokers win. The majority of brokers that we work with at Bravo Group trade predominantly with SME businesses; being SMEs themselves, they are uniquely placed to understand the needs of small businesses within their community and are able to forge fruitful working relationships. With 99% of all private sector firms in the UK represented by SMEs, and the number of businesses growing year on year since 2000, the opportunity for brokers is constantly increasing. And with the advance of technology making it easier than ever for entrepreneurs to set up on their own, this upwards trajectory can only continue into 2020 and beyond. It is immensely beneficial for independent regional brokers to align themselves with SME businesses, not only because of their strategic alignment, but also because many of those small and medium businesses will eventually grow into larger enterprises. It makes good business sense to build relationships with these growing businesses throughout their lifecycle. SMEs also represent a lower risk; a florist on
the high street is unlikely to put in a claim that would constitute a large loss to an insurer. This means lower capital requirements, and lower reinsurance costs for insurer partners. The combined success of the SME market also offers much for brokers to be pleased about, as though their individual premiums are smaller, the overall critical mass that SMEs offer is significant. Alongside their own status as SME businesses which enables them to understand their clients’ specific business needs, independent regional brokers are also agile enough to transact and trade business whether it is via e-trade, MGAs, insurers or Lloyd’s in a way that is both efficient and effective. SMEs are thriving and our role at Bravo Group is to empower independent regional brokers to capitalise on the opportunities they offer.
SMES IN THE UK – FAST FACTS
95.7% - Micro businesses percentage of the UK private sector 38% - The percentage of SMEs concerned about Brexit £8.3 billion – How much the UK SME market is forecast to be worth in 2022
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QUESTION 2
Where do the opportunities lie within the SME segment? Marine LENA WEAIRE,
Knighthood Corporate SME business has always proved extremely valuable to us at Knighthood. We first dipped our toe into the marine sector in the 1970s following a request from a client, and soon after we identified that one of the main areas of concern to SME operators on the Thames was their susceptibility to the possibility of supplementary call charges from the Protection and Indemnity (‘P&I’) Clubs that they had previously insured with. At the time, the availability of a fixed premium P&I contract was scarce and the need to identify an insurer to provide an adequate level of cover, but without the threat of call charges or release fees, became a significant factor in the construction of the marine craft and combined liability binders that have now become almost a trademark of ours. Over the following decades we have gained a reputation as an expert in this field. We continue to represent almost all Thamesbased passenger vessel operators in London today. Our success comes from a combination of face to face contact with our clients, and refining our offering over the years to enable us to compete at an equivalent level to the most common limits offered by P&I clubs. Finding our niche has enabled us to acquire significant levels of SME business throughout the UK and even into continental Europe. As our portfolio has expanded, so too have the opportunities to become involved with other types of craft, and we now have a substantial portfolio of workboat clients operating a diverse range of vessels and we are also able to provide solutions for static floating restaurants, offices, piers and hotels. SME business was what helped us to
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identify the business angle that would make us stand out from the crowd, and we believe that it will enable us to continue to succeed well into the future. Charity CHRIS CHAPMAN,
WRS Insurance Charities are concerned around cyber risks and the impact of data management. There’s still a concern around abuse cover too so there is a great deal of opportunity to support charities in this respect, particularly on an international basis. As SMEs, charities are looking for independent advice which is why they go to an independent broker. However, many distributors only have one scheme available for charities, whereas we can offer a range of different providers and deliver a bespoke solution dependent on the specific needs of the client. Essentially, it’s all about independence and helping charity SMEs to retain their individuality. I class myself as a ‘relationship broker’ rather than a ‘transactional broker’. People buy due to the relationship which is vitally important. In terms of quantifying the value that SME customers provide, not everything is about financial gain and value can come in
all shapes and forms. At WRS I decided to work with charities and churches as it aligned with my Christian faith. There is immense value in seeing a charity develop their ideas and witnessing their vision materialise; and knowing that your business has achieved what it set out to do. Most SME charities are led by people with a vision, and there’s a huge attraction in working alongside visionaries, and meeting their needs as they strive to achieve their goals; whether that’s building a new community centre or reducing knife crime. I don’t tend to work with nationals or corporates. As a small broker, we wouldn’t get on the tender for large corporate charities. Working with SMEs means that I can gain access to decision makers. Whether it’s the financial director or whoever handles the insurance, when dealing with smaller businesses you get to speak directly to the decision makers. That is the skill of a broker – identifying the people who make the decisions and liaising with them directly. Our business has expanded as a direct result of us specialising in the charity sector. I’d say the split of business between charity and church, and non-charity and church, is around 70/30 so it is predominantly our niche business that has driven our success.
Ethos Broking was created to do business
differently.
Our established community of like-minded brokerages across the country share similar values and aligned cultures, thriving and growing together. These businesses benefit from Ethos Broking’s experience, collective strength and purchasing power, while retaining their DNA, their brand, and their identity. Together we will add greater value than our individual paths being taken.
Let’s Talk.
Matthew Gibson Acquisitions Manager
matthew.gibson@ethosbroking.co.uk 01423 554 184 / 07484 916 922
CONNECTED THINKING, INDEPENDENT GROWTH www.insurancebusinessmag.com/uk
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UK SME INSURANCE REPORT
General insurance RICHARD LOVEGROVE,
Stride Insurance As a leading wholesaler of property owner insurance our experience is that although a property owner may own and control many millions of pounds worth of properties often held in multiple portfolios, their actual businesses are very difficult to identify. Typically, they do not advertise, they probably don’t have a website, and they employ very few staff usually from a small, tucked away location. Through local contacts most brokers will have some property owner business even if it is not their core business. This business is usually placed online through the various insurer portals. By using a wholesaler that operates a number of binders with both the composites
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and Lloyd’s syndicates the broker can often achieve significant advantages for their clients in terms of rates, cover and service. Equine, Funeral Directors and Motor Trade BARRY FEHLER, SEIB In terms of equine SME business, outside of horses and horseboxes, it’s fairly limited as it is so diverse – you’ve got everything from small liveries to your big manufacturers. The key to getting a foot in the door is to have specialist knowledge – we are successful because we employ lots of ‘horsey people’ who have those community links. I would say that our niche areas are not particularly growth areas; particularly in terms of equine as it’s expensive to own a horse; and we’re finding that local tack shops
are starting to shut down as people start to buy their saddles and clothing online. However, we are still managing to retain business and win anything new thanks to our reputation in the marketplace. It’s taken us years to build this up and get to this point, but we are very stable now. I’d say that our business is 80% niche, 20% general. Another area of specialism for us is funeral directors. There has been a lot of consolidation in this field and there is regulation coming their way which may cause some issues. We’ve been in this field for over 40 years and, again, the specialist knowledge is crucial. I would say that it’s not all about the premium, too – because we are experts, we are able to provide specialist cover and an excellent claims service. I would call equine a cottage industry, so
SMEs are extremely valuable to us. Over the years, SME business has helped us to turn over around £40 million GWP, so small business has been very big for us. I would say that if there is a good scheme in the marketplace, it is pointless to copy it. We see it time and time again – someone will come along with a copycat scheme, attack the business and undercut us by 10%, but invariably they will end up pulling out within three or four years. These cheap rates then damage the market. We run a motor trade scheme with Broker Network, and we work best with small garages. We don’t tend to target the larger businesses as we don’t find that we make money from them – everyone goes after that sort of business because the larger companies will happily sign off a huge premium. We prefer to target the smaller businesses, whom everyone isn’t scrabbling after, and be confident we can close a £10k premium and offer good service. Supercar AMIT PATEL, Anami Agencies The reason we went into the supercar world was that we needed a way to get in front of the SME market. We decided, due to our location, to focus on high net worth and use this as a way to get in front of business directors. We start with their car; then insure their home; which then removes any barriers to discussing commercial insurance. It’s about getting in front of the right people who could put us in the right places. Off the back of this we have won lots of shopkeeper business and a chain of hotels, with a care home in the pipeline. SMEs are hugely valuable for us. Our main book of business is SME-based; we have lots of clients whose premiums are less than £1k. However, that amounts to £1.3 million in GWP. Film and Media NEIL HARLE,
Essex Insurance Brokers There
are
only
limited
opportunities for brokers in the film and media sector, because quite a few of the covers are specialist and therefore not available on standard commercial combined policies. For this reason, there are a small number of brokers each with schemes linked to a specific insurer, and insurers will not offer quotes in competition with their scheme broker. The specialist brokers are well known within the media sector and most quote requests will come straight to the specialist media brokers, like us. Another important factor is the ability to quote and issue cover same day. This is not an issue for brokers who understand the risks and have a delegated underwriting authority. For example, at the time of writing I have two different clients who need to arrange cover for some hired film equipment they are collecting this afternoon in the USA. I knew nothing about either until I read my emails this morning. We are eight hours ahead of them, but I must get proof of cover to them before I leave the office today which is when they get up to get the equipment. General insurance KEVIN COBBLEDICK,
Together Insurance Solutions There are huge opportunities for brokers within the SME arena. For ourselves, we tend to specialise in property insurance, but have a broad spectrum of products and services that are offered to new and existing clients. Quite often the run-of-the-mill SME client does not understand the risks that are inherent with their trade and it is up to brokers such as us to educate and make them aware of the expertise that we bring to the table. The insurance industry shoots itself in the foot with a constant barrage of media focussing on price, free gifts and not truly demonstrating the value of what the product or service they are buying does. Most SME businesses look at the costs of insurance first as opposed to what it does for them. From the opening conversation I
want to know why they are on the end of the phone to me, is it price, cover or service… what is important to them? If price, then perhaps we are not the right route for you to take. We are, of course, a service-led business and when pointing out to clients they have other options such as aggregators or direct markets, they tend to buy in to what we have to offer. Even though the premium spend and subsequent commissions may be minor at initial start-up, hopefully the client will see the benefits a professional adds and be loyal and retain our services for a lifetime. As the business grows, you can add further products and services to their portfolio, making it a much more viable proposition from a commission standpoint. SME businesses are valuable to general insurance brokers because they invariably do not understand the wonderful world of insurance and it is up to us to educate and make sure their business is protected properly. They also bring with them a challenge to match insurers to sometimes weird and wonderful trades, thus making an insurance broker’s life incredibly varied and worthwhile - ever expanding our knowledge and expertise in an already ever-changing, complicated world of risk. I would also venture that for new start-ups, invariably they have an entrepreneur at the wheel, who quite often has more ideas or businesses ventures in the background... hence potentially more business for the broker.
MORE THAN A THIRD OF SME BUSINESS IN THE UK WAS SPREAD ACROSS THREE SECTORS AT THE END OF 2018: Construction – 12% Professional, Scientific and Technical – 11% Manufacturing – 9% Source: Department for Business, Energy and Industrial Strategy – Business Population Estimates 2018
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UK SME INSURANCE REPORT QUESTION 3
How can brokers appeal to new types of SME business? DES O’CONNOR, Bravo Group With millennials now making up the largest age demographic in the UK, closely followed by Generation Z, brokers will ignore the digital world at their peril. Aggregator sites are not likely to disappear any time soon, and it is this kind of selfservice tool that the younger generation are increasingly looking to see from their insurance providers. However, there is something the aggregators will never be able to offer. According to Broker Week, while Millennials and Generation Z are keen to use digital tools, they still require any trusted advice to be delivered face to face. Research carried out by Applied found that the most preferred and frequently used communication channel by millennials and Generation Z for their car and homeowners’ insurance, is a direct call to a broker. While this specific research refers to personal lines products, it’s worth bearing in mind for any new commercial lines clients when you consider that 69% of new businesses set up in the past five years have been established by people aged between 18 and 34. However, according to Cytora, 43% of small businesses purchased their most recent insurance online, compared to 10% in 2012. Brokers that can do both – communicate effectively in a digital format, while also applying that personal touch face to face – will be able to truly differentiate themselves from the competition. The most successful brokers make technology do a lot of time-consuming work for them, finding digital tools that their teams can easily adopt within their working day. This frees up time that the brokers can then use to focus on the personal, face to face aspect of client relationships where they can make the biggest impact. Technology can offer a great
deal of efficiency; for instance, a management information system that can deliver data analytics allows brokers to pinpoint which customers are likely to respond positively to certain products. It’s at this point when the broker can swoop in and bring the sale home in the most effective way. There are certain points when nothing but the personal touch will do; for instance, when finalising a sale, or offering trusted advice. However, where the digital world can work wonders is in helping customers to feel constantly connected to their insurance products. By using artificial intelligence, automated processes and simple online portals, brokers can leave some of the more menial requests (document access, renewal dates etc) to effectively run themselves, while they concentrate on the more complex, nuanced queries, and offer the added value they are famed for. Clients may be happy to receive their documents via text message or through an app; but they will still look for an in-depth conversation with a person when it comes to their business’s unique policy needs. Today’s SME owners are also keen to know that their broker is offering the most up to date and accurate cover in an ever-changing world; which is where data enrichment is key. This is becoming increasingly prevalent across the marketplace, allowing brokers to offer customers more bespoke pricing and personalised cover than ever before at the
quoting stage. This cutting-edge technology allows insurers to make snap changes in response to any fluctuations within the marketplace, that are instantly rolled out across all software platforms. Finally, the broking world may need to consider the way in which it sells policies in order to keep up with current trends. The ‘Uber-isation’ of the consumer landscape has meant monthly subscriptions are becoming the norm. Many modern suppliers now offer their services on a month by month rolling basis, and a more flexible approach would enable many brokers to stand out from their peers.
TOP 10 FACTORS WHICH INFLUENCE SME OWNERS’ DECISIONS WHEN BUYING INSURANCE: 1. Premium costs (61%) 2. Customer service or understanding of their business (58%) 3. Scope of cover (38%) 4. Product features (25%) 5. Transparency of products/details (23%) 6. Tailored products (20%) 7. Claims support (18%) 8. Brand awareness (12%) 9. Recommendations from family/friends (12%) 10. E-access/online (10%) Source: RSA, January 2017
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QUESTION 4
What value can insurers bring to regional SME brokers? STEPHEN TAYLOR,
Allianz Insurance Supporting our network of regional broker partners to meet the evolving needs of their customers is a responsibility Allianz is extremely passionate about. The changing dynamics within the UK commercial insurance market demands attention and that is reflected in the investment Allianz is undertaking to continually develop its proposition and customer journey within the SME sector. Insurers can bring enormous value to regional SME brokers, but equally it works both ways. Through our esta blished commercial branch network and strategic SME branches in Maidstone and Lancaster, we are extracting feedback from brokers to ensure greater insight is achieved. This helps us to shape and execute a combination of digitalisation, data, risk management and technical excellence. We acknowledge that for e-traded business our regional brokers require a transparent, seamless digital journey that is operationally efficient, and one that allows for touch points with underwriters. Continuous advancements to our market leading extranet QuoteSME ensures that the user journey benefits from our long term investment in data and digitisation. This has been reflected in the success of Allianz’s ‘Live Chat’ capabilities during the customer journey and advancements in data enrichment. Brokers can take confidence that their voice is not only being heard, but that feedback is a vital part of our decision making and integral to our strategic ambitions in SME. DEEPAK SONI, AXA Insurance When choosing an insurer for a small business, brokers should opt for a provider with a solid
track record in the SME sector. Some might be tempted to base their decision on the cheapest premium for their customer, but brokers must bear in mind their duty of care and ensure decisions are based on more than just price. Several unrated insurers based in Gibraltar or Denmark have gone bust recently, leaving policyholders temporarily exposed before alternative cover could be arranged. Brokers should choose insurers that offer financial security to their clients. Small businesses are going to get a better outcome from those providers that demonstrate SME expertise: Is it the insurer’s core business? What sort of services does it offer that are relevant to small businesses? Are there online claims tracking facilities or advantageous instalment arrangements? Is there risk management advice or access to other helpful online tools? Brokers should also check the quality of the insurance product and the extent of the coverage – beware of exclusions and high excesses! And they should take claims response into account. Is it quick and well-coordinated? Are current customers satisfied with the way their claims are handled and resolved? When a region is flooded or a dam threatens to break, does the insurance company reach out proactively to the clients based in the affected area or does it wait to be contacted after the event? If the prospective customer is at the lower end of the SME market, brokers will probably want to check out insurers’ e-trading platforms. Indeed, it might not make sense to place and manage that sort of risk manually. An e-trading platform will probably be the only way to service that small business and provide value for money. Finally, and no matter the size of the risk, intermediaries should choose partners that value the tripartite relationship between the insurer, the broker and the client. That attitude is the one that delivers the best levels of service.
DENSITY RATE OF UK SMES 1,563 – London has the highest number of businesses per 10,000 resident adults 1,192 – South West of England 1,190 – South East of England 1,134 – East of England 951 – West Midlands 946 – East Midlands 927 – North West 908 – Yorkshire and the Humber 897 – Northern Ireland 735 – Scotland 774 – Wales Source: Department for Business, Energy and Industrial Strategy – Business Population Estimates 2018
LEE MOONEY,
RSA Commercial Lines Collaboration is key, insurers and brokers have to be partners in risk; sharing knowledge, best practice and working in harmony for the benefit of customers. Collaboration ensures we listen to partners’ concerns and adapt our business to suit them. Regional brokers have to have a clear understanding of what an insurer’s appetite is and want one route in to get the right level of expertise, response and advice every time. We are very aware that time is critical for regional SME brokers. A firm and prompt ‘Yes’ or a clear and concise ‘No’ to risk acceptance is critical to ensure we do not add to frictional cost in this area. We get this, and we continue to simplify our business, most recently bringing our two commercial businesses together into a single team, with four core areas. Each has a clear appetite statement to market and we hope this makes working with us in a local market far easier. That local presence is essential. A branch network enables full UK coverage with underwriters that understand the local economy and specific needs of broker partners. It is embracing this while evolving through technology to improve ease and pace that will be the future of the regional broker model. Training and development for both our own people and our partners is a key part
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of our strategy, and helps to foster lasting relationships with regional brokers. We already provide highly successful CII CPDaccredited technical Learning Labs as well as the Broker Leader Programme, which demonstrates our commitment to brokers by supporting the development and retention of their talented future leaders. RSA’s Broker Leader Programme has now welcomed more than 50 brokers since its inception, the majority of which are regional brokers. To provide value, we must continue to forge even stronger links with our broker partners, taking the time to listen to them, to understand their wants and needs and then doing the best that we can to deliver for them. QUESTION 5
How can insurers break down the barriers to trading with SME brokers? Equine – Funeral Directors and Motor Trade BARRY FEHLER, SEIB When brokers go to insurers, insurers need to treat it not just as a win, but to ensure they are working with a broker who has specialist knowledge in their field. We work on a wholesale basis which means that other brokers come to us to avoid losing business, as open market doesn’t tend to offer cover that meets the clients’ needs. I would say that one thing insurers could do to improve their support of regional brokers would be to offer this wholesaling facility on a more widespread basis. We were the first in the market to launch a motorised horsebox scheme, and thanks to our knowledge and reputation insurers send risks straight to us. I wouldn’t say that insurers need to do much on cost – the price is the price. It takes time to settle down; when we started with our schemes, we didn’t know how to rate it. In terms of software house constraints,
difficult for us. Insurers are looking at SMEs and encouraging them to buy online via aggregator platforms; but if that’s the way the industry is going, what will brokers do then? I feel that there’s a lot more insurers could do to promote the value brokers offer. General insurance KEVIN COBBLEDICK,
Together Insurance Solutions
that isn’t something that affects us as we have in-house resource, including IT and data analysts, who take care of our MI and ensure we reach our targets, fine tuning our rates and policies. Management Information is hugely important. In terms of supporting our value as a broker, I’d say this is mixed – some do, some don’t. But they’ve got to trust us to get on with it. We’ll supply whatever evidence they want, but the insurers that we get on best with are the ones who trust us. Supercar AMIT PATEL, Anami Agencies Our concept of approaching directors via their supercar cover has worked really well, but it has been difficult to get insurers on side. Our connections through Broker Network have proved helpful, but there are gaps that insurers need to fill. Insurers are still looking at policies on an individual basis, rather than considering that they could insure the whole book of fleet, car and home in one go. The cars that we are insuring are our clients’ pride and joy – they aren’t driving them on a daily basis, but we’re still seeing restrictions with multiple cars. People are actually less likely to buy more cars now due to the emission zone, but insurers aren’t recognising that. It’s incredibly difficult to find cover for electric cars; in fact, we’ve had to let a couple of clients go because we just couldn’t place the risk. Price is another factor where insurers need to support us. If our clients can see a price online that is half of what we’re quoting, it’s
The larger composite insurers can learn from MGAs and underwriting agencies. When I speak to such organisations, I generally speak to the same individuals on a regular basis and build a rapport. There is an ongoing relationship and I am more likely to deal with people who I know and trust to help wherever possible. The composite insurers just have trading centres, and you never speak to the same person twice. While I have to say the service from the main insurers is generally very good and consistent, it never leaves me with a warm and fuzzy feeling knowing that I am valued. Of course, price is a factor, but not an overriding one. It is up to the broker to demonstrate the value of the product and not just what it costs. Sometimes the rate is the rate and clients understand that, as long as you explain the rationale behind it. I think insurers do a pretty good job of supporting us to reflect the value that brokers offer, to be honest. They provide us with a lot of tools to understand their markets and appetites, and how to trade with them. Perhaps it is because we are a fledgling business and our needs are quite simple, but I have no grumbles at all with the insurers that we use.
DISTRIBUTION OF PRIVATE SECTOR BUSINESSES IN THE UK England – 5.0 million Scotland – 331,000 Wales – 199,000 Northern Ireland – 133,000
Source: Department for Business, Energy and Industrial Strategy – Business Population Estimates 2018. Figures correct as of the start of 2018
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