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Is the insurance industry prepared to meet the needs of SMEs?

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SMEs account for about two-thirds of all businesses in Switzerland and more than 99 percent of all employees. The future of small company insurance: What do clients want? by Deloitte reports that this is a market where insurers may still see significant growth by providing supplementary protection or advice services. This is as a result of SMEs increasingly understanding the need of insurance.

They appear to have the highest degree of confidence in insurers ever since the Covid epidemic broke out. SMEs were significantly impacted by their favourable interactions with insurers throughout the crisis. However, despite the high level of trust, more could be done. Of the 5,300 SMEs questioned worldwide, 400 were in Switzerland, and many of them expressed a need for more consulting services and solutions that were better suited to defending their company. Insurance firms may benefit from new growth potential as a result of this.

Digital Channels and Trusted Advisors Are Important For SMEs

The demand of SMEs to have a trusted adviser in addition to digital platforms is a second trend. According to the survey, rather than the business or the underlying sector, the qualities of the particular insurance buyer determine how SMEs interact with their insurance provider. SMEs cherish face-to-face interactions with brokers and agents, but they are also increasingly emphasising digital interactions with their insurance provider. Opportunities will arise for daring, growth-oriented insurers if brokers and agents are encouraged and given the tools necessary to become better advisors.

Non-Traditional Players Welcomed by SMEs

The research also notes a third trend: SMEs require guidance and a comprehensive variety of services that go beyond insurance. SMEs are seeking to their insurance company for alternatives outside the realm of standard insurance coverage. They seek guidance on the key hazards that their company is most vulnerable to and are interested in acquiring extra services to protect themselves.

Additionally, Swiss SMEs are willing to work with non-conventional actors like major technology corporations to buy insurance and services. By offering consulting services, utilizing partners and ecosystems, and understanding SMEs better than large IT, insurance carriers may broaden their conventional offering of solutions.

Also Read: SME Stock returns 1600% in seven years to Allottees with Multi-Bagger IPO

There is a Higher Risk of Damage and Loss For SMEs

Following Covid, SMEs are more conscious of their risks and weaknesses and are likely to pay more for insurance. According to the report, even in a developed market like Switzerland, 53% of Swiss SMEs anticipate raising their expenditures on commercial insurance soon.

According to the survey, the major reason SMEs buy more insurance is because of their heightened susceptibility to harm and losses in the post-Covid environment. The recent occurrences have made Swiss SMEs more aware of the possible consequences of systemic risks like energy outages and other potential “black swan” disasters.

With the conflict in Ukraine, cyber dangers are also becoming more evident, with state-sponsored attackers using weaknesses to access or disrupt vital infrastructure and services. Due to these uncertainties, SMEs are always trying to expand the types of coverage in their portfolios and comprehend how the risk environment is changing:

The Insurance Industry Faces New Challenges

According to the survey, SMEs would value proactive risk analysis, as well as recommendations to help them better understand their risk exposure. The increased interest in insurance among SMEs should be viewed by insurers as an indication of future development in the market, and they should act fast to develop new products and propositions that are in line with these changing demands.

Also Read: Contributing to the Growth of SMEs

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