NZ SME report spells trouble for brokers
New Zealand SMEs are relying less on brokers for their insurance needs, mirroring trends in Australia and other developed markets, according to Vero.
About half of SMEs bought business insurance via brokers last year, down from 61% in 2016. The percentage that purchased direct increased to 49% from 39%.
Significantly, almost half use a broker for some but not all policies.
Vero says the second New Zealand edition of its SME Insurance Index spells trouble for the broker model, which has previously been businesses’ go-to channel.
“This suggests a number of SMEs are considering alternatives for their insurance,” the index report says. “There are a range of reasons for this, but ease and convenience is dominant.
“This suggests it is very important for brokerages to consider how they can make the insurance experience as easy as possible for SMEs.”
About 74% of respondents cite ease and convenience as a reason to bypass brokers, while only 36% link the decision to price.
More than 900 New Zealand SMEs were surveyed in November for the index.