By FintechOS · June 24, 2021
6 minute read

The Future of SME Insurance is Customer Centric

The Future of SME Insurance is Customer Centric

For decades, SMEs have faced a financial gap from banks and insurers alike, limiting their ability to face risks and grow. How can insurers better serve SMEs’ needs, and gain market share at the same time?

Last year, the FCA identified 4,000 “predominantly small and medium sized” firms – the largest commercial segment in the UK – as having low levels of financial resilience and being at a heightened risk of failure following COVID-19 shocks.

Even ahead of the pandemic, SMEs’ need for external finance – to stay alive or fund expansion plans – was estimated at €400 billion ($481 billion) in 2019 in Europe alone, where SMEs account for 65% of the private-sector employment (or about 100 million workers before the pandemic outbreak).

When such big crisis hits, SMEs – whose cash is their lifeblood – face a major threat to their own viability. This is the reality-check or the playground where insurance companies have kicked off digital initiatives to grab new market share or, most of times, to reduce customer churn (an Accenture report released in 2015 showed that customer disloyalty was costing insurance companies $470bn across personal lines, life and P&C, and only 29% of customers were happy with their current insurance provider).

“Trust and transparency are more important than ever due to financial challenges that have emerged during the pandemic”, according to McKinsey, who ran a survey to track recent SME market trends.

Can such a vulnerable segment of customers turn into a profitable one? How?

Time is now

“Carriers have a once-in-a-generation opportunity to make inroads in the SME segment with a refreshed set of propositions and a customer centric approach”, McKinsey wrote last year, revealing that, these days, SMEs’ “top factor in selecting an insurance provider is getting <good value> from insurance products”.

As FintechOS showed in a previous article, the SME market is only now beginning to gain its rightful share of attention from the insurance industry. With radical changes in efficiency and scalability from digitalization, and new segmentation and analytics capabilities provided by new technology, addressing the SME market becomes not only viable, but profitable.

“Customer centricity is a culture, not a project. To be successful, customer centricity must pervade every action and decision in every department” – Puneet Bharal, Digital Insurance Solutions at FintechOS

It all starts with the cultural mindset, whether it is about product building, selling, customer experience, data management, risk calculations, fraud prevention, innovation, or the business model itself, Puneet Bharal, Digital Insurance Solutions at FintechOS pointed out during a presentation delivered recently at Amsterdam Fintech Week (XFW). That means that the entire organization needs to embrace a holistic vision that places customer at the very core of the business.

According to Puneet Bharal, customer centricity “is a culture, not a project”. “To be successful, customer centricity must pervade every action and decision in every department because every interaction with the customer, reinforces what the company really thinks of the customer.”

Four key CX themes

Bharal has explored several examples of innovative plays in digital SME insurance – like Pikl, Flock, Floodflush and Zego – and picked out the key customer centric features and design mindset which established insurers can learn and apply in their own product innovation.

You can check out how a customer centric business insurance can be designed around 4 key CX themes in the infographic below:

Designing more customer centric business insurance

Four key CX themes

Source: FintechOS

Let’s take Pikl’s innovative solution to serve SMEs in the facility industry as an example. The Sharing Economy has created a new set of entrepreneurs, with AirBnB being a huge success story, changing how people holiday and how homeowners and landlords let out their spare living spaces. “Pikl takes its understanding of its clients’ needs, their available time, and its insurance expertise, and has designed a simple offering in non-Insurance language to give its clients the protection they need,” Puneet Bharal explained.

Founded in 2016, Pikl claims to be the first specialist sharing economy underwriter in the UK nowadays.

Louise Birritteri, CEO & Founder, Pikl explained the reasoning behind Pikl’s customer centric business mindset in a recent FintechOS webinar, where she was a panelist. One of the golden rules of customer centricity done right, she said, is knowing your customer. “Understanding who they are, and their specific needs is key both from insurance product perspective but also for how you guide them through your product journey”.

Flock is another example of nimble digital insurance, where the customer only pays for coverage when they’re flying their drone. Drones – which are an expensive piece of kit – are increasingly useful for various entrepreneurs like videographers, photographers, surveyors, or those working in the agriculture field. Therefore, Flock is serving its SME customers since commercial drone insurance is done by the hour, month, or year.

“One thing is for sure”, FintechOS’s Digital Insurance Solutions concluded. “One-size-fits-all policies, with complex conditions and pricing dependent on bottlenecks of human advisors, and paper-based processes taking weeks to complete… are 20th-Century approaches that are no longer competitive.”


Amsterdam Fintech Week (XFW) gathers all stakeholders and players active in the ecosystem of digital finance. The goal is to connect players within the European Fintech space and to involve key stakeholders to participate.


MAIN PHOTO Credit: Unsplash


On the same topic:

➡️ Register to watch this webinar on-demand: Customer Centric Business Insurance, featuring Louise Birritteri, CEO & Founder at Pikl and Puneet Bharal, Digital Insurance Solutions at FintechOS, both quoted in this article.

➡️ Download this whitepaper: Unlocking the SME Insurance Opportunity — Insurtech Insights.

For more findings on this industry, ➡️follow the Insights section on our website.


Related articles:

SME Insurance: The Three Golden Rules of Customer Centricity Done Right

The Road Ahead: How We Can Reinvent Insurance

Five Prerequisites for Becoming a Digital Insurer

Customer-centricity – A Matter of Cultural Shift

Life Insurance in the New Normality – Three Take-Aways

Insurance: What’s On the Horizon?

How Insurtechs Are Winning Trust

Insurance: The Scale of the Crisis

What’s in Store For Insurance In 2020? Three Take-Aways

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