Small to medium enterprise (SME) in Australia has continued to experience significant growth in 2017 and there are over two million businesses across the country made up of companies with fewer than 250 employees. Reports from the National Australia Bank indicate that SMEs contribute 57% of Australia’s gross domestic product (GDP) and SMEs employ a truly impressive 70% of the total Australian workforce.
These figures highlight just how important SMEs are to the Australian economy and with the continued growth, insurance brokers are adjusting their services to better service clients involved in the SME sector.
An industry ready for change
The rapid growth of the SME market has prompted a 2017 survey to be completed by McKinsey & Company to look at the current SME trends which impact on the way insurers carry out their business.
The survey showed that although only 19% of businesses switch insurance providers each year, almost three quarters of small business owners did not have particular loyalty to their insurer. This provides significant motivation for insurers to meet the specific needs of SMEs and increase their loyalty. The survey also found that there were various segments within the SME sector which have different needs and risk profiles and insurers need to adjust their approach to target these various groups.
The needs of the various SMEs will depend on factors such as the size of the organisation, the nature of the profession, and the individual attitudes of the specific SME. For example, some SMEs may be focussed more on cost while others focus on convenience. These diverse niches highlight the need for a more personalised approach to business insurance for SMEs.
The impact on your insurance broker
So, what do these trends mean for your insurance broker? It highlights the ongoing need for insurance brokers to have a good understanding of each segment of the sector, to understand the individual needs of the client, and to offer targeted, cost effective solutions. While there are online avenues for small business owners to pursue insurance, a trust based relationship will continue to be an essential part of the insurance process as business owners enjoy the personalised service of dealing with a broker.
Your insurance broker will keep a close eye to changes within the SME insurance market and their professional experience and insider knowledge means that they can capitalise on new models of service to deliver you highly quality cover at a competitive price. It’s important to note that a recent report by the Insurance Council of Australia found that 13% of SMEs don’t have insurance and 1.9% report being underinsured. These worrying statistic show that regardless of the nature of your SME, you need make sure your risks are covered with quality insurance cover.
Business insurance for your SME
For business insurance brokers Perth, GSK Insurance Brokers can help. You need to have a solid risk management strategy in place when you’re running your own business and that’s where our professional brokers come in. We work with you to identify your specific areas of risk and develop a comprehensive insurance package so you can be confident that you’re protected financially when things go wrong. For peace of mind, give us a call!
GSK Insurance Brokers offer quality business insurance Australia. Contact us today on (08) 9478 1933 for a business insurance quote.