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The relationship between insurer and broker has always been a mutually beneficial one, with brokers providing insurers with a valuable route to market, and insurers underwriting the risks for customers.
As the link between the insurer and the end customer, brokers determine which policies are best for their clients and work hard to secure the best quality cover at the right price. Commercial insurance is often seen as complex to understand - especially for small businesses who don’t have the in-house expertise. Therefore, brokers also play a key role in providing peace of mind for SMEs that they have sufficient coverage for both current and emerging risks at the best price.
But there’s a problem: all too often brokers struggle to serve small and medium enterprises (SMEs).
With 99% of companies in the UK being SMEs, it should represent a huge opportunity for brokers, however the challenge when it comes to serving SMEs is one of cost-effectiveness. Lower value policies mean lower margins, so time spent servicing a particular SME quickly becomes expensive.
But this is beginning to change. Automation and data science are transforming the market.
According to CB Insights Insurtech raised a record $15.4 billion in funding in 2021, nearly double 2020’s levels, developing technology that helps support the important insurer-broker relationship, rather than disrupt or displace it.
This has led to an influx of new solutions that automate time-consuming tasks, help brokers lower the cost of serving commercial customers, scale up their offerings and provide a better client experience.
SMEs want a digital experience, as well as a human touch
Business customers expects a service that is fast, frictionless, and personalised. But due to the challenges faced by regulated businesses, they often end up optimising processes rather than maximising customer relationships.
According to the Insurance Brokers Global Market Report 2022, combining AI and human creativity will power the Intelligent Broker, an automation program for the insurance industry. Brokers will be able to resolve complicated obstacles, produce innovative products and services, and join or build new markets. In addition to this, the insurance industry will improve customer service and prevent customers from fraud.
E-trading is making it easier for brokers to serve SMEs
So, what are insurers and brokers doing to improve the way they work together and with SMEs? Much of the focus is on digital platforms and electronic trading (e-trading), which are automating tasks that were previously done manually.
E-trading systems have been in use for more than a decade, allowing brokers to enter detailed information about their clients and receive a fast response from insurers. The advantage of e-trading is that it helps brokers provide better service to SME clients by streamlining processes and reducing costs.
What’s changed over the years is the way e-trading services are delivered and how they connect brokers to insurance companies. In the past, e-trading systems were basic in function and often connected to just one insurance company: brokers entered client details and waited for the insurer to provide a quote.
Today, e-trading platforms have become the primary method for doing business in commercial insurance, connecting brokers with dozens of insurers in a matter of minutes.
Deeper company insights lead to better results
The challenge for brokers with SME customers partly because it is time-consuming to gather all the information necessary to develop a full view of the risks they face.
To help insurers to underwrite more effectively, e-trading platforms are now using APIs to connect to data sources that provide enriched company information on SMEs.
By tapping into company insights like group structure, financial profiles and real-time credit information, brokers and insurers gain a clearer picture of how a company operates. This results in a better underwriting process and provides more accurate pricing. Even more importantly, it enables brokers to trade more policies and ultimately results in SMEs getting the coverage they need in a fast and efficient way.
When it comes to supporting SME’s FullCircl has brokers covered
FullCircl is helping brokers sharpen their focus on the companies that fit their specialism or verticals. Part of that is helping them get the right data on small business customers.
We recently partnered with Codat, the universal API for small business data, to provide seamless integrations to the accounting platforms used by 84% of UK SMEs. Combining this data with FullCircl’s Business Information Graph (B.I.G™), Engage monitoring and business development applications, and Connect rules-based automation engine means that brokers get an instant real-time 360° customer view.
Find out more by downloading our Insurance Broker Toolkit. Get commentary on the biggest issues impacting the broking industry, market research, and free guides on handling underinsurance and the hard market.
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