Blog: How can the insurance industry build trust with SMEs?

While many industries quickly embraced the changes brought by Covid and pivoted accordingly, insurance has struggled to adapt, and as such has suffered ‘a greater reduction in trust levels than any other sector during the pandemic’, according to a Salesforce UK report.

SMEs are the largest commercial segment in the UK – accounting for more than 99% of all companies and 77% of the workforce, according to McKinsey – and given how reliant the insurance industry is on the segment for generating jobs, opportunities, and growth, it is absolutely vital for it to work hard at rebuilding the trust that has been so badly weakened among SME clients.

Embracing technology

Research indicates that embracing technology is one of the key ways that the insurance industry can re-establish trust with SMEs.

For example, a recent report titled ‘The importance of trust in the SME insurance sector’ by the Society of Insurance Broking concluded that, ‘as the world changes and different areas advance, such as technology, we should be adapting in the same way for our SME clients to remain relevant and demonstrate our continued competence’.

As such, some challengers to the more traditional industry players are implementing technologies that have worked well in other sectors, like mobile order and pay solutions, to simplify the ways by which key SME decision makers research and purchase insurance products.

These technological innovations have been made in light of an emerging trend among SME clients of a desire for more convenient and efficient services. This is corroborated by a recent Hubb survey of over 1,000 UK-based SMEs, which found that 39.7% of respondents do not proactively speak to anyone when renewing their commercial insurance, instead opting to complete the entire process online.

Further to this, the survey showed that 66.9% of respondents would be happy to renew and manage their policy via a ‘self-service’ model if it meant saving both time and money, not only enforcing the idea that online services are considered more convenient, but also that clients value the opportunity to keep their costs down.

Being transparent

It is evident that many SME clients do not have a clear understanding of their insurer’s intentions when selling certain products to them.

Indeed, Hubb’s survey found that more than half – 55% – are unsure or do not think their insurance broker provides the most competitive or best quote to suit their commercial needs.

In the spirit of being completely transparent, insurers must be up front with SMEs by declaring their earnings on every transaction that they make, rather than waiting to be asked by the client, as this can give the impression that they have something to hide.

To avoid creating conflicts of interest, brokers can fix all their insurer partners at one flat commission, meaning no hidden earnings are being made or deals taking place behind the customer’s back.

Some firms have gone as far as to enable their clients to see every interaction that they make via their own online dashboard, meaning SMEs are kept in the loop at every stage of the process.

Not only does this type of personalisation provide accountability for insurers’ actions, but it also helps to improve customer communications and minimise the frustration they may experience when getting access to the information they require.

The path to rebuilding trust

By implementing these changes to the ways that they are currently operating, insurance professionals can begin to move towards a new insurer-customer relationship model in which the insurer is seen as a trusted advisor, but this change will not come overnight.

The pandemic has done little to bolster trust in the insurance sector, the reputation of which had already been tarnished by a minority of unscrupulous organisations, and responsible insurers will need to work hard to improve their clients’ perceptions of them.

What is clear, however, is that the path to rebuilding trust with SMEs is right at insurers’ feet – all they must do now is take the first, decisive steps along the challenging, but ultimately hugely rewarding, journey towards forging stronger client relationships.

Edward Halsey, co-founder and COO of Hubb