Small business owners have a lower level of trust in insurers and brokers compared to last year. Photo / 123RF.
Small business owners have a lower level of trust in insurers and brokers compared to last year. Photo / 123RF.
The number of small and medium sized enterprises (SMEs) who say they don't trust insurers and brokers has risen in the last year.
Research by insurance company Vero which is owned by Australia's Suncorp has found more than a third (35 per cent) of businesses don't trust insurers up from30 per cent last year.
Mistrust in brokers has also risen with 23 per cent lacking trust in the industry, up from 17 per cent.
Catherine Bateman, executive manager for customer experience, for Vero, acknowledged the drop in trust but said it was small.
Vero's SME Insurance Index 2019 report pointed to declining levels of trust across developed societies in recent years with studies showing falling trust levels in government, business and major financial institutions.
But it also acknowledged that many small and medium-sized businesses "feel wary" of the insurance industry at the moment and said "this perspective of mistrust is a relevant factor for all those who deal with SMEs in the insurance space".
Bateman put the drop-down to the global trend for more business owners to try and do it yourself when it came to buying insurance.
That meant businesses were missing out on the experience and knowledge that brokers could bring, she said.
Catherine Bateman, Vero's head of customer experience. Photo/Supplied.
Bateman also said the environment was a factor with regulators putting pressure on insurers for their conduct and culture in the last year.
"The industry is under scrutiny and are feeling the impact of that."
The view presents a challenge for Vero which mainly sells insurance via brokers although it also owns a joint stake in AA Insurance with The Automobile Association which does some direct sales to businesses.
The report found the lack of trust was filtering through into behaviour with 38 per cent of those who say they can't trust brokers reducing their use of them compared to 17 per cent of the total population.
They were also less likely to be satisfied with their own broker.
Bateman said what it meant for Vero was that it needed to continue to evolve the relationship between the broker and customer and ensure there were tools for brokers to provide in-depth services to businesses.
"Insurance is an area of a high level of trust. We would encourage people to find the broker that fits their business."
Of the 900 small and medium-sized business owners and decision-makers it surveyed 31 per cent bought their insurance through a broker - down from 33 per cent while 34 per cent did not use a broker at all, up from 21 per cent.
