Small and medium-sized businesses (SMEs) make up over 90% of all businesses, but they are still struggling to obtain proper coverage compared to their larger counterparts. While few have stepped up to the plate, there is a lot of opportunity in the insurance industry for those who can tailor their offerings towards SMEs.
During Insurtech Insights London 2023, Rochelle Clarke, Founder & CEO of Continuity Strength; Roger Ferrandis, COO & Co-Founder of Wenalyze; and Andrei Gaman, Commercial VP at FintechOS; sat down with Florian Graillot, Founding Partner at astoryaVC to discuss why there is a lack of good SME business insurance coverage and the immense potential insurtech solutions providers have to successfully address the multiplying risks businesses are now facing.
The portfolio of risks businesses face today has completely shifted over the past few years. According to a recent global risk management survey conducted by AON, the top 10 global risks are as follows:
The top risks noted in AON’s survey look a lot different than they did pre-COVID-19. Because many of the risks brought on by the pandemic were unexpected and therefore uncovered, many SME businesses suffered and shut down from non-physical damages that would never be paid out.
Now, the number of risks SME businesses face is steadily climbing, with little hope that insurers can keep up with them all. As a result, SME insurance carriers are partnering with insurtechs to keep up with environmental shifts and rising consumer demands.
The increase in popularity of insurtech solutions can be attributed to the growing demand for easier access to insurance services, especially among SMEs. The services they need don’t match those provided to large corporations or individuals, but SMEs are starting to expect the same specialized treatment. “It’s obvious to an SME when the policy wasn’t made for them”, says Clarke. SMEs are looking for personalized services and policies that meet them where they are.
According to Deloitte, the most important reasons why SMEs choose their insurer include:
Using insurtech solutions, SME insurance companies can now innovate through the eyes of a consumer. Insurtech gives them the ability to integrate and automate new and customized services, in the places their customers visit most frequently.
The insurance industry is built on data. However, many SME insurance providers struggle to capture and utilize the data they’re sitting on. It becomes especially difficult to shift through data on SMEs because their businesses are constantly evolving – changing addresses, adding new services, etc. Policies are often then renewed without SME insurance companies taking note of these changes.
Insurtech solutions provider, Wenalyze, takes every source of information publicly available on a given business (think social media and company websites) and uses it to help insurers offer SMEs the right coverage. FintechOS’s partnership with Wenalyze enables insurers to better understand customer risk profiles, price policies more accurately, and create more personalized and relevant insurance products for customers.
No matter what industry a business falls under, increasing awareness and taking preventative steps play key roles in mitigating risk. About 80% of businesses become more resilient as soon as they put a business continuity plan in place. However, many business owners struggle to understand the coverage they are purchasing because of the complicated insurance language being used.
Insurtech solution providers can play a pivotal role in supporting SMEs as they ask for help by incentivizing the adoption of risk management practices and providing valuable guidance and education throughout the process. By offering tailored services and embedding risk prevention measures, insurtechs are able to empower SMEs to take charge of their risk strategies and protect their businesses more effectively.
New risks pop up every single day, making it nearly impossible for any SME insurance provider to keep up. Even with policy holders taking preventative measures, there’s plenty of services insurers can add to their portfolios to further protect their customers. Partnering with an insurtech service provider can help drive data integration, better customer experiences, streamline internal processes, and much, much more.
Want to learn how FintechOS can help your business tap into the SME insurance market? Click here to learn how we quickly launch and service personalized propositions, while leveraging your existing data and systems.
