Google eats into broker business

The number of SMEs using insurance brokers continues to slip as business managers get more comfortable with researching their insurance needs online and buying direct, a major new study has found.

Vero this week released its 2015 SME Insurance Index, which showed that the proportion of SMEs that purchased their last insurance policy via a broker had slipped from 50% to 44%.

The decline has been most marked in men and older business owners, who have traditionally been brokers’ strongest customers.

Sam Sanfilippo, Suncorp Commercial Insurance Broker Distribution National Manager, says the survey highlights the fact the insurance industry is in the grip of a major evolution.

“We have seen a big increase in the numbers of SMEs who want to personally research their insurance,” he says.

“The evolving environment of how businesses want to obtain their insurance means that the insurance industry as a whole – and brokers in particular – need to adapt to new styles of interacting with customers.”

The research, gleaned from surveying more than 1500 SME decision-makers, also suggests that many direct clients would consider using a broker.

“This suggests that there is strong scope for growth for brokers through attracting this large pool of potential new customers,” Sanfilippo says.

“According to the findings, the single most important factor to help brokers in their businesses is having a strong online presence.

“When those considering using a broker were asked how they would go about finding a broker, online search was the strongest source by far. Recommendations came next, either from colleagues, friends, family or business advisers, such as accountants.”

As part of the report, Vero is also releasing some resources for brokers, including an animated video explaining the benefits of using a broker.

The Vero video aims to help clients understand the benefits of using a broker.

NIBA CEO Dallas Booth commended Vero for conducting such high-quality broker-focused research, as well as following it up by producing useful tools for brokers.

“The report highlights the importance that brokers demonstrate the value they deliver to their clients and that value goes well beyond price,” he says.

“It includes all the things brokers do, like helping people understand and manage their risks, going to the market to identify the best programs available and being advocates when claims need to be processed.”

Download the full report here. Vero has previously published SME Indexes in 2011, 2013 and 2014.

Meanwhile, Vero has upgraded its VeroCentral website for brokers with increased functionality.

“We believe the new VeroCentral offers brokers a very pleasant surprise,” Sanfillipo says.

“Consultation has been central to the development of VeroCentral. We sought input from brokers at the Vero Expos, from pilot testing programs – we’ve listened and acted on their ideas.”

Check it out here.