The SME market has ample room for allcomers
Marsh is the latest heavyweight to throw its SME-shaped hat into the ring.
It could also potentially be the most significant.
The development could set the cat amongst the pigeons that are regional brokers. It will stoke the fires that continue to smoulder around words like "independence" and "service."
More likely, though, it will only add further weight to the evidence that the SME sector is a market of almost limitless potential.
“SME offers both good returns and good retention. Claims costs are low, and niche markets plentiful.
In the past twelve months, a steady procession of insurers including the likes of Allianz, Zurich and most recently R&SA, have outlined plans to grow their business in the market, which is valued in the region of £10bn.
The involvement of the national brokers, namely Willis and Marsh, coupled with the acquisitional antics of Towergate and Oval, also suggests that that the global brokers running out of room in the high corporate end of business.
Larger organizations have the advantage of price and specific services once regarded as peripheral, such as risk management, that they will rely on to lean on their regional counterparts, who beat the tailored service drum to a rather old – but nonetheless catchy – tune.
Yet that tune is one that the big guns would do well to play. It remains to be seen if they can, or at least if consumers believe they can.
“Global brokers are running out of room in the high corporate end of business.
SME, after all, offers both good returns and good retention. Claims costs are low, and niche markets plentiful.
Above all, with over four million potential customers – and many more to come in the coming years – it represents a massive opportunity for the insurance industry to cash in.
On the other hand, the myriad of SME-related businesses brokers and insurers represent have an opportunity of their own. They stand to benefit from the tools, increasingly specialised expertise and, now, competition driven service that the industry has to offer.
An in depth analysis of this issue can be found in next week's Insurance Times
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