A new survey has revealed the factors that SMEs consider when choosing an insurance policy – and it doesn’t spell good news for brokers.
RSA has released data analysing what influences business owners’ insurance buying decisions and discovered that cost of premiums was ahead of the rest – named as a top three factor by 61% of the survey’s respondents. Perhaps more worryingly, by comparison, just 38% of SMEs ranked scope of cover as a top deciding factor.
“It is worrying to see that such a small proportion of SMEs rank the scope of cover as a top three factor,” said Russell White, schemes and deals director, regions and SME, commercial risk solutions at RSA. “This is undoubtedly contributing to the underinsurance problem we see among SMEs, and it is crucial that brokers highlight its importance to their clients to ensure they are sufficiently protected.”
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.
“Brokers’ understanding of their clients’ businesses and the quality of their service are the only factors that come anywhere close to the influence the cost of premiums has when it comes to taking out insurance,” noted White. “This highlights the great importance of brokers and their role in developing a sound understanding of their clients’ businesses and insurance needs.”
The same survey questioned brokers on which policies are being most commonly sought-after by SMEs and they highlighted: public liability insurance (82%), commercial combined insurance (58%) and business property insurance (36%). Of more concern is that SMEs seem as though they have yet to come to terms with the importance of cyber insurance, with only 6% of brokers identifying it as one of the top three insurance products their SME clients want.
Here is the complete top 10 list of the 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%)