The business market in which we operate is a living thing – always in the process of evolving and changing. And that can certainly be said of the insurance industry which has undergone massive change over the past decade. With the growth of online and aggregators, customers now have far greater choice.
The analogy with the giant supermarkets and the old grocer shop is perhaps enlightening.
People hark back to arguably a golden age of personal service and individual treatment from their family grocer. But at the same time they continue to flock to the supermarket.
Price, choice and convenience are the factors that influence them. But they still grumble if there’s a long check-out queue or their favourite brand of biscuits is not readily available. Supermarkets respond with home deliveries, internet shopping, customer service centres, specialist delis, butchers and bakers all of which are marketed under the guise of getting back to the personal service of the old grocer shop.
While you can’t compare supermarkets with insurance brokers there are common bonds which link the two – “choice” and “value”.
Then the question is whether you’re a follower of Waitrose or Asda. In the insurance world, call centres, buying online have all served – in their different ways – to distance many from their customers.
Customers now look for a blend of strong products, good service and fair value. Commercial customers in particular are also increasingly looking at understanding risk and getting the right cover rather than a bundle of unrelated products which may not be effective in either managing the risk or saving money.
In the SME market, brokers are increasingly becoming trusted advisers and business consultants taking on and understanding the risks in a wide range of areas from employment issues to business continuity and health & safety.
Commercial customers are also facing increasing social, economic and political challenges, which place risk on their business.
Just take a look at the impact on SMEs of the growing threat of cyber crime, access to capital during a downturn and new EU obligations.
In this new world brokers need to sell on value and we have to tackle the difficult questions which maybe the directs and the banks don’t want to handle.
SMEs want continuity and personal contact.
They are also looking for stability and long-term savings, which can play to the broker’s strengths.
This has led to the evolution of our business model in which, because we are closer to the customer, we now carry out many of the tasks that were once seen to be the traditional territory of insurers: high-quality advice, product development, marketing and claims.
We’ve built up this expertise and professionalism – through people development – to give SMEs the first-class advice they need.
As a local broker our future is tied up with the health of our customers and by the ways we can help them to manage their needs in a crisis.
It’s essential, for instance, to ask our customers clients plans they have in place and how we can help to advance them… because, to my mind, managing risks will be the key to the survival of many SMEs.
* John Leigh, Director at Sheffield Broker IFM Insurance