SMEs favour brokers
15 May 2017
The first New Zealand edition of Vero’s SME Insurance Index shows most of the country’s small businesses are buying cover through brokers – but it warns against complacency.
About 69% of SMEs with six or more employees are more likely to buy policies through a broker or adviser than elsewhere, compared with 57% of businesses with five employees or fewer.
But the report says brokers should strengthen a “trusted adviser” role with customers to guard against the type of usage decline being seen in Australia.
“While direct purchase, especially via online channels, is still very low, international trends suggest this will change and that brokers and advisers need to prepare for this to change in years to come,” the report says.
Reasons identified by respondents for using a broker include saving time, access to expert knowledge and advice, gaining the right insurance at the right price, and peace of mind.
“When small businesses grow, regardless of the type of industry they are in, they reach a point where their business becomes more complex, and they may need advice to understand the impact of change and growth on their insurance needs,” Vero EGM Customer Experience Campbell Mitchell said.
Being unable to trade for a long time is the biggest concern for surveyed businesses, followed by a potential economic downturn and increasing costs.
Larger SMEs are also particularly worried about finding good staff.
In New Zealand, 97% of businesses are SMEs with fewer than 20 employees, and the sector is a significant growth engine for the economy.
“It’s important we understand their needs and provide them with right solutions, so they can get on with running their business,” Mr Mitchell said.
Vero found 70% of SMEs that have been with their broker for less than three years would like to hear from them at least twice a year.
“The research shows there’s a correlation between the number of times SMEs are contacted and satisfaction,” the report says.
“Industry or occupation-related information on protecting their business and mitigating risk are areas of interest for SMEs in regards to what they want to hear from their broker.”
The report draws on research involving more than 1000 business owners and decision-makers.
Full copy of report HERE