We asked brokers for their views of the SME market, their customers and their insurer partners

In our survey this month, brokers said they believe that SMEs are under-insured and unaware of the risks to their businesses. They reported that insurers have a good understanding of the SME market, but need to be more flexible regarding underwriting.


1 Do you find that SMEs have a good level of awareness of what cover they need?
Brokers’ majority view is that SMEs’ understanding of their own risks is poor. A large proportion, 82%, said SMEs lack awareness of the areas where they need insurance. However, 14% reported that SMEs have a good understanding of required cover. A total of 4% don’t know.

2 In your experience, which risks are SMEs most unaware of?
Technology risks were cited by 40% of respondents as the exposure where SMEs were most lacking in awareness, while 12% indicated that employee liability was the most poorly recognised risk. Among the 42% of respondents who selected “other”, under-insurance, business continuity, management liability and environmental liability were some of the areas that were commonly noted as being off SMEs’ radar. But only 6% of brokers cited severe weather as a risk of which businesses are unaware.

3 Do you think that SMEs are generally under-insured?
A tendency towards under-insurance has become increasingly common since the 2008 recession as businesses look to save money. Almost all, 92%, of broker respondents said that SMEs are under-insured, echoing government analysis of business resilience following the summer 2011 riots. Only a small percentage, 6%, of brokers reported that under-insurance was not a problem among SMEs, while a further 2% were unsure.

4 How have direct online sales affected the SME market in your view?
Responses as to how online sales have affected the SME market can be grouped roughly into five. The most common thread was that online purchasers tend to focus exclusively on price, and that without the expert guidance of brokers they are vulnerable to under-insurance, or buying invalid policies. “It’s too easy to buy on price, with no advice or thought of cover given or needed,” one respondent said. The second most frequent comment was brokers reporting no impact on the SME market from online sales, while the third most repeated point was that smaller companies were more likely to buy online. “Direct sales have an impact with small start-ups, usually with young people who are IT literate, and do everything online.”

5 How do you rate the commercial combined packages on the market?
Brokers were positive towards commercial combined packages. The largest proportion of respondents, 57%, said “the best packages offer bespoke options”, while 31% saw packages as “generally high quality”. Only 12% reported that these products “frequently fall short of requirements”. One said: “Insurers are generally too black and white regarding the trades they will cover.”

6 Has red tape and regulation ever put you off from dealing in certain industry sectors?
Our survey indicated that 64% of brokers say red tape or changes in legislation does not put them off dealing in certain sectors. However, 30% said that it has stopped them from doing business, while 6% are unsure.



Which insurers have the best understanding of SMEs?

‘Most have a good grasp of the basics, but often support systems and personnel can only truly help if it’s in the script’

‘AXA, Allianz’

‘They probably all understand SMEs, but that does not mean that they are organised to help them or willing to invest in them’

‘All the major composites, but they still rely too heavily on assumptions in statements of facts’

‘Aviva and RSA’

‘Those that show flexibility in underwriting and offer bespoke options are best’

‘Zurich and RSA’

‘Aviva, Allianz and LV=’

‘All do. It boils down to good cover, premiums, service and, obviously, settling claims’

‘HCC and Hiscox’