Independent Insurance is about to launch a blitz on the small- to medium-sized business market with five-year insurance deals.
The company will soon begin trials of its Businessrisk.com initiative with between ten and 20 brokers. The insurer insists it will underwrite and survey each business, exactly as if it were a bigger client.
It will also give the small business risk management advice and a range of services. But the extra information the insurer will gather should enable
Independent to price its product competitively.
Independent insisted it would recoup its investment through long-term deals. "This should lead to good loss ratios but will be expensive to run. On the grounds of the cost, we will only do this on the basis of a five-year policy," said Ian Helmore, Independent's assistant general manager.
The minimum policy will be £5,000 spread over five years - high enough to cut out the very small businesses, but low enough to allow Independent to target small but growing firms.
The insurer's move will be a challenge to the traditional players. Many insurers have targeted the small business. RSA recently launched its Enterprise scheme, specifically targeted at the sector. Other companies such as NU, Axa and Groupama are also active among small firms.
The Government recently set up a Small Business Service as a separate unit within the trade and industry department.
It also appointed a special board to advise the government on helping small firms. Government figures show that small businesses account for 45% of non-government jobs and 35% of private sector turnover.
There are 3.7 million businesses in the UK, of which 99% have fewer than 50 employees.
Independent is also aiming to move many of its current business customers from three year to five deals. It claims to have signed its first £1m deal recently.
The insurer is piloting an internet-based policy delivery system to its brokers, aiming to deliver policy documents within five days. It claims to be in single figures on the Manchester and Birmingham pilots already and producing 90% accuracy but wants to tighten up before rolling out the scheme nationally.
Brokers will also soon be able to track claims with the company via the internet and commercial customers will be offered a password to a risk management portal.
Independent revealed its latest strategy to 200 brokers on its Absolute 2 roadshow, which finished last week.
The company will be working with brokers on their "wish list" target clients. Under the scheme Independent will research a broker's potential comercial client thoroughly and develop a package designed to win that client to the broker and to Independent.