The insurer’s executive managing director says the SME market will be an area of focus for the next two to three years

AXA Commercial, a division of multinational insurer AXA, plans to spend the next two to three years focusing on the small to medium enterprise (SME) market, offering support – both insurance and otherwise – to small business owners and startups.

Jon Walker, executive managing director at AXA Commercial, explained: “The failure rate for new startups is quite high and we’re really interested in whether there is something we can do from an insurance perspective, or perhaps beyond pure insurance, to help SMEs through the various stages of their lifecycle.

“When an SME is in startup mode, there will be a whole number of things the person running the business is potentially facing and thinking about for the first time. We’re interested in how can we understand what those things are and what solutions can we put in place to make help and advice easily accessible.”

For Walker, this process involves segmenting the SME market further, understanding the different stages of an SME’s journey and clarifying what support is required at each of these lifecycle levels.

Partner for success

The firm hopes that by providing a helping hand to SMEs in this way, they will engender loyalty – this means that small business owners may be more likely to turn to AXA for their insurance provision as their organisations grow beyond the SME arena into more established, larger companies.

“Our view is if we can help an SME through their early years, then the chances are that will engender a degree of loyalty and we can be with them on their journey as they hopefully grow and develop,” Walker said.

“That’s an area we feel passionately about; we can definitely do more work there and potentially think beyond pure insurance and think about being a partner for that business rather than just an insurer that pays claims as and when they come along.”

Direct distribution

Although Walker warned that increasing numbers of SME customers are going direct when it comes to purchasing insurance, he still feels that broker distribution is an important part of the insurance chain.

Walker confirmed that AXA Commercial may explore being more “joined up” in terms of its direct distribution; however he added that the firm is “not looking to actively try and convince SMEs to move away from brokers into the direct channel”.

He added: “For many, I think it’s absolutely right they have their insurance needs taken care of by a broker or an intermediary.

“We recognise brokers will continue to be the dominant distribution channel within the commercial market for many years to come, so it’s important for us that we maintain and build on those relationships and recognise [that] different brokers have different needs.”