Scope of cover not a big factor in insurance purchases
Cost of insurance premiums ranked as deciding factor by 61% of SMEs when picking a policy.
Cost was closely followed by two areas in which brokers clearly have a big role to play: for 58% of businesses, either customer service or understanding the client’s business were listed as top three influencers. This highlights the crucial role brokers play in the process as well as the need for insurers and brokers to strike a balance between price and service, according to RSA.
Only 38% of SME owners ranked the scope of cover as one of their top three influencers, despite its importance if a claim was to be made through the chosen insurance policy.
When questioning brokers on which policies are most sought after by SMEs, the most popular three (excluding employers’ liability insurance) were:
- Public liability insurance (82%)
- Commercial combined insurance (58%)
- Business property insurance (36%)
- Cyber insurance is one of the least sought after policies, with only 6% of brokers identifying it as one of the top three insurance products their SME clients want.
Russell White, schemes and deals director, Regions and SME, Commercial Risk Solutions at RSA, said:
“It is worrying to see that such a small proportion of SMEs rank the scope of cover as a top three factor. This is undoubtedly contributing to the underinsurance problem we see among SMEs, and it is crucial that brokers highlight its importance to their clients to ensure they are sufficiently protected.
“Brokers’ understanding of their clients’ businesses and the quality of their service are the only factors that come anywhere close to the influence the cost of premiums has when it comes to taking out insurance. This highlights the great importance of brokers and their role in developing a sound understanding of their clients’ businesses and insurance needs.”
Top factors which influence SME owners’ decisions when buying insurance:
- Premium costs (61%)
- Customer service or understanding of their business (58%)
- Scope of cover (38%)
- Product features (25%)
- Transparency of products/details (23%)
- Tailored products (20%)
- Claims support (18%)
- Brand awareness (12%)
- Recommendations from family/friends (12%)
- E-access/online (10%)