Digital Risks, a broker focused on the needs of digital businesses, is providing a blueprint for how brokers can compete in the SME space, leveraging technology to provide next-generation servicing.
The broker’s strategy hits the mark in addressing the key requirements that a growing and tech-savvy small business would look for in a provider. The service:
- is online: Our SME Insurance Survey has found that SMEs generating more than half of their business online will, perhaps obviously, most likely want to use the online channel to purchase insurance. However, the seepage of SME business, particularly micro-SME, away from traditional channels towards online purchasing has been occurring for a number of years and this isn’t specific to digital-focused firms. Business owners, having experienced servicing levels from non-financial services like Amazon and Netflix, or even from familiarity in purchasing personal insurance online, have been looking for the same from their commercial insurance provider. The broker channel has needed to step up its game here in an effort to compete with direct providers for business.
- reflects their own business: As a digital business itself, the broker is able to play off its own experiences and needs, and can project that it is “in the club” to its customers and understands them. Rightly or wrongly, the insurance market at large can be perceived to be a little behind the curve on innovation – digital businesses that make significant use of social media, cloud computing, and mobile technology will be attracted to fresh and innovative insurance brands that speak their language.
- is flexible: With a subscription-style model, Digital Risks enables businesses to pay monthly and, more importantly, to cancel cover at any time. This offers customers not only greater flexibility in affordability and accessibility, but also caters to businesses that feel they may often change their shape and insurance requirements.
- provides a tailored approach: Digital Risks seeks to achieve what is essentially the traditional offline experience of using a broker: having risks considered individually and possibly placed with different underwriters. The process has simply been modernized into a single online experience. A key challenge in the SME space for insurance providers is the balance of offering a personalized service for low-margin business. It’s in leveraging technology that this can be achieved.
While Digital Risks has been built to focus on technology and media businesses, the strategy it has followed to target that sector could very well be the model for all smaller-end SME brokering.
By Stewart Mcewan, Head of Content, UK General Insurance