Direct market insurance buyers are increasingly considering using brokers, while the percentage of businesses purchasing coverage through a mix of channels continues to grow, the latest Vero SME Insurance Index shows .
The annual survey found that 61% of surveyed businesses used mixed channels, up from 54% last year, with the increase driven by a decline in those who buy entirely through direct channels. The percentage of “heavy broker users” does not change.
Some 62% of direct buyers said they would consider using a broker in the future, up from 50% last year and 41% in 2019.
Vero Head of Distribution Anthony Pagano said satisfaction and trust levels remained high among other positive results for brokers from the survey, now in its twelfth year.
“I believe brokers are raising the level of awareness about the trusted risk and insurance adviser role they play,” he told insuranceNEWS.com.au.
Mr Pagano said the survey highlights the pressures clients are experiencing, with 61% of respondents citing economic concerns as a concern. Two-thirds of businesses reported that they were experiencing a large or moderate impact from inflation and more than half were affected by increased supply costs.
At the same time, 61% of businesses are planning changes to their business in the next year for various reasons, but 41% admit that insurance is the last thing they consider when doing so.
“The report clearly shows that Australian businesses are looking for ways to manage the pressure of economic conditions,” Mr Pagano said. “But making uninformed decisions about their insurance, or even making changes to their business without thinking about the insurance implications, can put themselves at risk.”
Nearly half of respondents said they made some changes to their insurance because of economic conditions, such as a change in their excess or the frequency of premium payments.
The survey shows that 78% of clients are satisfied with their broker, which percentage remains higher than pre-pandemic levels, after an unexpected increase to 84% in the previous survey on the back of unusual conditions amid covid disruptions.
“It’s great to see that the groundwork that was made in improving satisfaction last year has been largely held this year as we emerge from the pandemic. We know that mixed use is here to stay, but there appear to be some signs that’s where non-users are increasingly considering using a broker,” Mr Pagano said.
“In an uncertain and challenging environment, it is understandable that clients may be looking for additional support in these important business decisions.”
The survey found that 68% of broker clients were satisfied with their claims experience compared to 48% of direct clients.
Broker clients tend to be more satisfied with claims on more complex policies, with 85% satisfied with professional indemnity claims compared to 46% of direct clients, while the differences are smaller for simpler claims such as commercial motor.
Confidence in brokers remains strong amid a period that has included record flooding and recurring natural disasters, as well as a volatile economic environment. The survey found that 31% of SMEs agree with the statement “at the end of the day, you can’t trust insurance brokers”, which is in line with last year.
The level of respondents who agreed that you can’t trust insurance companies increased to 37% from 33%, while 48% agreed that recent events have made them more wary of the industry , up from 41% previously.
“Overall, these results suggest that the industry as a whole, and brokers in particular, have been successful in maintaining people’s trust despite the high number of claims and challenging conditions,” the report said. .
The Vero SME Insurance Index report is based on research involving owners and insurance decision makers at 1500 SMEs and 250 large businesses, covering a range of business types and locations. The survey is conducted by BrandMatters.
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