Sponsored content: Chris Kenning, group chief executive of Stubben Edge Group, explains what support SME brokers need to flourish and how insurtech can provide the helping hand
Small and medium-sized enterprises (SMEs) are the backbone of the UK economy - a fact that is widely appreciated by government, trade bodies and wider society. SMEs make up 99% of the nation’s business population.
Within this demographic sits the fourth largest insurance sector in the world, managing around £1.7tr worth of investments and employing hundreds of thousands of people across the nation. A sector composed of thousands of brokers – small business owners in their own right – that offer a range of services and products that deliver peace of mind to millions.
The recent shakeup in the banking sector is a stark reminder and gives rise to the question of whether the UK is hitting the mark on adequately supporting broker SMEs that are at the coalface of strengthening the economy amid a testing environment.
Supporting small business owners better
Much has been said about doing more to support brokers to unlock the true value of their businesses, which cater to people who need them most across villages, towns and counties. Often, these clients rely on brokers being as accessible as walking into a post office or bank for their regular needs to be serviced.
But, sentiments around providing more support for SME brokers has not translated into the delivery of better support for these businesses.
A lot has been said about the need for the broking sector to be innovative, business friendly and agile. While this is commendable, brokers remain saddled with the antiquated set ups and regulatory hurdles that hold them back. Insurtech Stubben Edge was born as an antidote this.
Because of the sector’s make up, independent brokers must juggle multiple responsibilities, while being mindful of their margins.
Despite the UK insurance marketplace being sophisticated, it remains riddled with legacy systems, regulatory burdens and incomplete data, all impinging on the ability of businesses to do things differently.
The need for consistent lead generation coupled with access to reliable data and business insights are, understandably, front of mind for brokers. Added to this is the challenge of a rigid finance environment that does not account for business owners’ daily requirements.
After all, no broker is the same. And, overwhelmingly, the challenge that brokers must contend with is the fact that there isn’t a clear cut route to scale without external investment. A lot of external investment is often used to buy services or capabilities that brokers might be able to access in a different way.
However, there are many ways brokers can scale up that does not require them to sell out or raise equity. An organic growth route is possible.
Facilitating brokers’ growth and success
So, what does meaningful support look like for these business owners?
It means tapping into tools that enable them to start, grow and manage their burgeoning businesses without wiping out their margins. A single engine room that does the heavy lifting.
As one of the top 25 distribution platforms in the UK, with 13.4 million people in our database, Stubben Edge has a clear understanding of what it takes to unlock the next phase for many of the UK’s business owners – without forcing them to exit prematurely or plateau when they have a lot more to offer.
Often, big consolidators only give brokers time when they are near the £2.5m gross written premium (GWP) mark. To gain their attention often requires either investing significantly in marketing or specialising in an extremely niche sector. No small feat.
Accessing the support required – regulatory compliance, bespoke insurance products, time saving administration systems and customer retention boosting services – could mean leveraging Stubben Edge’s platform.
This includes a white labelled plug and play offering, which unlocks access to data and insights curated by sector specialists, as well as tools that can power brokers’ back office – without bogging them down with the burden of the technological build.
Secondly, as brokers scale, we have the capabilities to work with them to help develop their own bespoke back office and data offering, specifically suited to their requirements.
Access to alternative finance also regularly comes up as key hurdle. Rigid financing mechanisms often ignore the very niche requirements of what it takes to service most businesses.
Stubben Edge, therefore, delivers a cash management platform within its suite of products, which also provides access to loans. This has the potential to unlock the next phase of a business owner’s journey.
While no single broker model is the same, this tailored digitalisation support levels the field in a way price comparison sites cannot. It frees up brokers to maintain their long-standing relationships in communities and opens the door for them to pursue new connections.
The combination of a sophisticated back office and the personal touch of a local business owner cannot be underestimated in enabling brokers’ scalability.
Brokers on Stubben Edge’s platform are saving an average of 30% on operational costs and time, as well as between six and 12 months on product development alone. We have also seen brokers double the value of their business in a single year.
With more brokers being added to the constantly growing Stubben Edge network, we have a unique vantage point.
We are able to consistently tweak, learn and adapt our offering to service and support these entrepreneurs a lot better.
We recognise our role as working in tandem with brokers, acting as an accelerator for those looking to reach their next level, and providing the tools they need to get there.
All this frees up the UK’s brokers to focus their energy on the value added services they bring to insurance propositions and on building their businesses.
There is no better time to make support for SMEs more accessible. After all, these entrepreneurs deserve better – they are our backbone after all.