SME insurance needs to move away from packaged products and instead give customers more guidance and tools to design their own personalized policies.
Hiscox is one of the few providers currently giving SMEs more control in assessing their own needs. Its online direct channel supports micro businesses in assimilating their own tailored insurance package. It has a page explaining each commercial product that it offers, and a tool which suggests products that may be appropriate for the SME’s industry. It constantly reminds customers of the relevance of each product when processing a quote, allowing them to include the products they perceive are needed.
Packaged products are undeniably efficient and convenient for micro SMEs that are looking to make one quick purchase. Commercial products are, however, difficult to commoditize as all businesses have differing needs, even if they are within the same trade. Packaged products define and assume policy types and the level of cover that is required, resulting in generalized blanket offerings that any customer can buy regardless of whether they are specific to their needs.
Customers are becoming savvier about researching before they buy, and are more confident about making their own decisions. More providers of SME insurance therefore, like Hiscox, need to give customers greater control in designing their own personalized policies. Providers need to publish and distribute more information and guidance to help customers decide what they do or don’t need. They also need to develop easy-to-use tools which allow customers to bundle together a bespoke assortment of insurance products.
More SME providers need to follow Hiscox’s lead and move away from the ideology that one size should fit all.
By Danielle Cripps, Insurance Analyst