The insurance purchasing environment is becoming more complex, as businesses increasingly embrace a hybrid approach, blending utilisation of brokers and direct channels for their insurance needs.

The VERO SME Insurance Index for 2024 shows that in the current environment we are seeing an increase in the proportion of people who use a mix of channels to buy their business insurance. Within this group, there are two types of mixed channel users – light users (those who buy 1-50% of their business insurance through a broker) and then there are moderate users (those who buy 51-90% through a broker).

The strongest growth is amongst light users. This group has grown from 19% to 47%, while moderate users have remained broadly stable at around 25%.

These light users probably only buy one or two policies through a broker, and therefore are unlikely to be getting comprehensive risk advice that reflects the full risk profile of their business.

Unsurprisingly, only a very small percentage (less than 10%) of these businesses buy all of their insurance direct. However, similarly small percentages of large and very large businesses use brokers for all or almost all of their insurance. Very large businesses are more likely to be moderate broker users, with 52% buying between 51% and 90% of their insurance through a broker.

How brokers are being used by different user types

The data suggests that light users are more likely to use brokers for functional reasons such as time saving and cheaper prices.

In contrast, moderate and heavy users appear to have a greater appreciation for the brokers’ skill and added value services and are more likely to cite reasons such as peace of mind, expertise and proactive advice.

Reasons to work with a broker

Heavier broker users also nominate a wider range of reasons, suggesting deeper engagement and appreciation of the value a broker adds.

  • Buying more through brokers will mean you receive the benefit of more holistic insurance and risk advice.
  • Brokers can match you with tailored insurance solutions that meet your specific needs and risk profiles, thus adding value to the client-broker relationship.
  • Brokers are able to help with risk-related tasks, providing additional value.
  • Brokers can provide value for money instead of simply the lower prices
  • Brokers offer tailored advice based on an understanding of your business and its risk profile can help guide towards appropriate risk prevention measures and insurance coverage.

Source: Vero SME Insurance Index 2024

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