LONDON, Dec. 19, 2016 /PRNewswire/ -- Summary
Verdict Financial's "UK SME Insurance: Distribution Dynamics 2016" report looks at how SMEs buy insurance coverage and the reasons behind their purchasing decisions. This report also examines the services SMEs are currently receiving and the additional amenities they would like from their provider going forward. Other influential factors on the market are also taken into consideration, such as the location of the business (home or on-site/office), or the age of the business owner.
- Purchasing insurance online via a PC is the most common method by which SMEs arrange cover: 31.6% of respondents claimed to purchase the majority of their insurance over the internet on a desktop PC.
- SMEs are typically very loyal to their providers with most product markets commonly retaining as much as 80% of their business across SMEs of all sizes, but particularly those at the larger end of the scale.
The SME market is important for commercial insurers as SMEs account for the majority of the UK economy. With insurers increasingly targeting the segment, the market is very competitive and propositions are evolving to cater for small and medium-sized enterprises (SMEs). E-trade, via a broker, is becoming more of a central focus for the insurers in this space, as is the distribution of high-volume, low-value business via the direct channel.
There has been an unmistakable growth in focus on direct-to-SME insurance propositions over previous years, but 2016 has seen brokers fight back. Direct insurers continue to enjoy a significant share of commercial business but brokers are beginning to follow suit in terms of the propositions they're offering. Increasingly they are striving to promote a more streamlined offering online, as well as maintaining their advice-led services. Brokers driving the resurge are those that have applied their high-volume online personal lines capabilities to the commercial sector, such as Tower gate and Swinton.
The benefits of the direct channel continue to be long-term customer ownership and a fast-flowing distribution chain, enticing the smallest businesses to purchase conveniently online, akin to how their personal insurance is bought. While this is the battleground for micro enterprises, for larger businesses the demand sits towards the other end of the spectrum; a desire for a wider range of services and deeper relationships where capacity from providers is perhaps not being provided to them. Nevertheless, brokers are beginning to cater to customers residing at both ends of the scale, sparking stiff competition between the two channels, a duel which is likely to intensify in the coming years.
Reasons To Buy
- Identify the most prominent sales channel for SMEs.
- Adapt/re-evaluate your distribution strategy and proposition to meet the needs of modern consumers.
- Discover the factors influencing SME purchasing decisions and distribution channel selection.
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