The importance of ‘trust’ in the SME insurance sector
09 May 2021
04 May 2021
New Generation Group, Society of Insurance Broking
The 2018-19 Broking New Generation Group publish their research findings and supporting case study on how the insurance sector could refocus its efforts towards building trust with its customers, particularly SMEs.
New Generation Group report
Trust is a mammoth challenge in the insurance sector. It has a significant impact in how insurance is purchased and serviced. Without trust, customers cannot be confident in what they are paying for and are not forthcoming with accurate information which damages all parties involved.
Customers find it difficult to see the value of insurance until they have a claim. The media portrays insurance in a negative light that affects all areas of the sector equally. Therefore, any organisations avoiding or incorrectly paying claims are destroying the progress of their peers who are working hard to rebuild trust.
In an everchanging world the insurance sector should keep up with client expectations and understand their needs. Brokers can add huge value to SMEs and be confident in explaining how they do this to combat price sensitivity. Trust destroyers such as dual pricing and an unreasonable unwillingness to pay claims should be reassessed across the sector so that a future of trust and understanding between parties can blossom.
Research indicates trust can be achieved by improved efficiency, competency and transparency. Relationships with SMEs can be built by offering realistic solutions and keeping promises. Technology can support customer relations by creating robust systems and innovative products, such as telematics and the use of apps. This way it will be possible to stay relevant and keep up with other industries who are mastering this.
To address this, the 2018-2019 Broking New Generation Group created a research report on how the insurance sector could refocus its efforts towards building trust with its customers, particularly SMEs. This research was performed by Abigail Coates, Natasha Hookings, James Ramirez, Prin Thayaparan and explores the following:
- What is the current trust climate?
- What are the barriers to building trust?
- How do other industries compare?
- The research and what was discovered
New Generation Group case study
In support of the report, a case study produced by Kathryn Knowles provides a contextual example of improving trust through engaging SMEs in employee wellbeing and protection policies.
For a small company, employees are key to their success. If an employee is ill, or decides to pursue a different career path, a small business can suddenly find themselves unable to fulfil client requirements and face months training new staff. Employee retention and wellbeing is key. The government is currently discussing ways to encourage employers to look after their employees’ wellbeing more. Group protection is a potential solution that the insurance sector can offer and raise better awareness of.
Insurers sometimes design products that they feel is right for an SME, without actually asking SMEs what they actually want. These policies should be a two-way development process. Insurers can offer expertise over what is potentially available to SMEs, and SMEs can explain what it is they actually want and need, and what will attract them to pay for what is an unessential cost.
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.