Despite perceptions that SME customers are increasingly price-driven, they do value the risk management advice that can come alongside a strong broker-client relationship
Some of the best brokers when it comes to SME risk management are smaller regional firms that have strong relationships with their clients.
Boutique brokers are able to work effectively with a range of SMEs because of their links to the local business community and their reputation as professional advisers. It’s a position that can provide a competitive edge over larger, more distant firms, and those that compete purely on price.
But, says Aspen Risk Management managing director Kevin Pallet: “It’s incredible that take-up of risk management support by brokers is disappointingly low. SMEs want risk management advice. What a fantastic opportunity for brokers struggling to differentiate not on price.”
He adds: “There’s perhaps a lack of confidence among brokers, and a perception that the client only wants a cheap policy.”
NIG is among the insurers that provide brokers and SMEs with risk management support, completing 6,100 surveys a year across the UK. It has recently introduced a new scored approach, using a traffic light system to highlight above-average and good performance, as well as areas for improvement.
NIG risk control manager Allister Meal says: “Underlying claims is where premium is eroded - we paid out £24m in burst pipe claims that were preventable with basic risk management.”
NIG’s contract with independent risk control provider RiskSTOP has now ended and the insurer is bringing risk improvement services in-house, forming a new team at its Peterborough office.
New hires and acquisitions
Lark snapped up commercial broker Cadogan Hanover Park in September 2011 from its parent Barbon. All staff at the Croydon-based broker are expected to transfer to Lark. CHP has cemented a reputation in a diverse but well-defined set of sectors, covering: care homes, film and media industry, haulage, plastics, manufacturing and funeral directors.
Towergate’s SME division was formed in December 2011 from Riskline, YOUR Insurance Group and Telford Haulage. Amanda Walton stepped up from her role as partnership strategic project and development director to head it. The restructure has led three SME managers to quit. Towergate Midlands managing director Andy Smallwood is going to Gallagher; YOUR Insurance Group managing director Robert Rees is moving to Jelf; and Risk Solutions Nottingham managing director Sally Swann is also stepping down.
Insurers name some top SME brokers
Richard Bolton, Manchester, North West
Richard Bolton’s preferred approach is to develop a bespoke solution and to negotiate direct with underwriters. Free online facility Ask the Expert lets clients email their queries direct.
Cowens, Mansfield, East Midlands
Cowens has developed its own unique approach to risk management, named Survival Capability, using a 126-point checklist to design an insurance programme. The broker offers a suite of online risk management resources to help clients, including advice resource BusinessGuard, and CrisisPro, for preparing and maintaining a business continuity plan.
Watson Laurie, Bolton, North West
Watson Laurie keeps a sharp eye on legislative changes. Its mission - “We prefer to act rather than react” - relies on getting close to clients. A link with Rapid Support Services provides 24-7 call-out building services after fire or flood.
Lorica, Hemel Hempstead, East of England
Lorica takes a five-point approach to risk management: identify, quantify, review reduction techniques, decide on cover, and assess change over time.
Romero, Leeds, North West
Romero won Insurance Times’s Independent Regional Broker of the Year Award in December. Its risk management team supports clients in reducing their number of claims, and offers health and safety advice. Trade association links include the Fluid Power Association and the Road Safety Markings Association.
Sutton Winson, Twickenham, South East
Sutton Winson’s risk management strategy is to be treated by its clients like one of their own departments. Its areas of expertise are complex risk for charities and not-for-profit organisations, including medical insurance for charity workers overseas, as well as media, construction, and chemicals.