Advice from colleagues is the most common source of insurance information for medium-sized businesses, according to a new report.
Aon surveyed 100 businesses with turnovers of between $15 million and $100 million. Aon Head of Marketing Andrew Gordon says the report shows there are concerning deficiencies in how businesses interact with their brokers and many are unnecessarily exposed as a result.
Colleague recommendations are the most common source of information of insurance needs at 50%, well ahead of industry associations and broker recommendations, at 34% and 33% respectively.
“This is a worry given that more than two-thirds (71%) of businesses rate their insurance needs as complex,” Gordon says.
“It’s frankly unlikely that consulting with colleagues is going to provide the information a business needs to get the right type and level of insurance.”
He says businesses are typically underinsured by between 25% and 45%, with the pub and hotel sector at particular risk.
According to Gordon, the report highlights how crucial it is for businesses to have clearer, more engaging conversations with their broker.
“Many businesses report frustration with a number of elements of their broker relationship, including infrequent transactional style contact, when a full and frank exchange of relevant information between broker and business is required,” he says.
Earlier this month, Aon launched a new website, www.aon.com.au/mybroker, aimed at giving business managers a better idea of the questions to engage their broker on.