New research from Asteron Life has revealed that 17% of small and medium enterprises (SMEs) have income protection insurance.
The data comes as part of the launch of the insurer’s first SME Insurance Index, which it announced last week and you can read more about here.
“97% of New Zealand businesses have 20 or fewer employees, which means that SMEs represent a significant market for insurers and brokers,” said Asteron Life’s Acting Executive Manager Life Distribution, Trevor Longbottom.
“This research is the first step towards helping advisers understand the unique challenges faced by SMEs, and identify ways to tailor their offering towards them.”
Although the research found 61% of the SME market have life cover, other personal insurance products are receiving less attention.
“The uptake of personal insurance products shows there is a significant opportunity to talk to SMEs about covers beyond life insurance, particularly in the context of their business ownership and how that might affect their cover,” said Longbottom.
The uptake of personal insurance products shows there is a significant opportunity to talk to SMEs about covers beyond life insurance…
The research indicated that SMEs are feeling considerably time-poor and according to Longbottom, the respondents were partial to the idea of one adviser looking after all their policies.
“SMEs are facing a lot of time pressure and many are also feeling quite isolated. This represents a significant opportunity for advisers to add and demonstrate value,” he said.
“Feedback from the SMEs we interviewed showed there was real appetite for advisers to be assisting with insurance products across the full spectrum of business and personal needs.”
Although SMEs noted being time-poor, this was not the main reason they chose to use an adviser for their life insurance needs.
The research found the top reasons were for an adviser’s expertise (86%) and service (70%).
Finding the cheapest cover wasn’t a major concern of SMEs, with 45% indicating they used an adviser because of price and 49% saying they thought finding the cheapest policies was important.
“It’s great to see that when it comes to life insurance, SMEs are really looking for expertise and service,” said Longbottom.
“Customers are relying on advisers to help them find the right cover, not just the cheapest cover.”
Other areas SMEs indicated that advisers could help them included:
- Giving advice on changes to their business that might impact their insurance (64%)
- Providing them with general advice on insurance (52%)
- Offering advice on ways to mitigate risk (51%)