Many SMEs going it alone at renewal time: Vero Index

More than half businesses are renewing their insurance without receiving expert advice from brokers, with younger buyers particularly likely to complete their own reviews, the latest Vero SME Insurance Index finds.

The annual report, now in its 11th year, found 52% of SMEs surveyed renewed without broker input, with 14% of those conducting their own review and 38% renewing “as is” with no review or advice

Only 39% of SMEs under 50 years of age renewed with the assistance of a broker while 21% in that age-group reviewed their insurance on their own.

Vero says renewals are a key opportunity to engage with clients, who may have seen significant changes in the past year, and the data also shows SMEs who receive advice on renewal are significantly more satisfied than those who didn’t.

“Brokers who simply rely on clients to make contact with them regarding any business changes, may find themselves in a situation down the track, that could have been easily avoided through early detection and a conversation to provide a solution or options to consider,” Vero Head of Commercial Intermediaries Anthony Pagano said.

Businesses using a broker show high levels of satisfaction, with 84% scoring their adviser eight or more out of 10, while broker users are also much more satisfied with their claims handling experience.

Other key findings from the index, which surveys 1500 businesses, show 14% of SMEs purchased 90% or more of their insurance through a broker, down from 27% last year, while mixed channel buyers increased to 54% from 44%.

“The biggest reason SMEs gave for not using a broker is the belief that they can do it easily themselves, not broker dissatisfaction, which is of some comfort to brokers,” Mr Pagano said.

This year, for the first time, Vero also separately provides findings from a survey of 100 insurance decision makers from larger companies with at least 200 employees.

Larger businesses have an even higher satisfaction rate, with 96% scoring their broker at least 8 out of 10, while the survey found 73% of large buyers purchase insurance through a mix of direct and broker channels, 6% buy direct and 21% substantially through a broker.

Mr Pagano says the role of brokers is rapidly evolving, while remaining highly relevant throughout the business lifecycle.

“Although broker satisfaction levels are at a four-year high, which reinforces the role and advocacy that a broker plays within the current environment, there remains many opportunities for brokers to take advantage of,” he said.

See Analysis.