Small and medium-sized enterprises (SMEs) represent the vast majority of the world’s business fabric. In Spain, 99.84% are companies employing fewer than 250 people.
They therefore represent a huge market for insurers, and there is now a real opportunity to offer a next-generation customer experience. The SME insurance market is worth $11 billion, but there is one difficulty that makes it really complex, and that is that at the end of the day these are companies of different sizes, in very different sectors and with different needs. Moreover, while the insurance sector is more rigid to change, SMEs are constantly changing their business models and evolving rapidly.
That is why in this article we want to talk about the future of commercial insurance and what actions the industry needs to take in order not to be left behind and to remain competitive in the insurance market.
SMEs still lack adequate insurance cover
The future of the sector depends on the incorporation of new technologies. Currently, 80% of SMEs are underinsured or have incorrect coverage, and almost a third of SMEs do not have a Standard Industrial Classification (SIC) code that accurately reflects their business. In most cases, this is because insurers do not have accurate and up-to-date information about their customers, mainly because they have no way of accessing it quickly. This is where technology companies like Wenalyze come in; our services use open data technology and artificial intelligence to access the right SME data and generate an up-to-date database in real time, so that when the insurer needs to update the policy for its customers, it can do so with current and complete data.
Younger generations increasingly represent the market
There has been a generational shift among SME business owners. The demographics of business owners have started to shift towards younger generations who have different needs when it comes to insurance products and customer experience, such as the use of digital channels and self-service models.
Younger generations are driving a generational transition in SME ownership. As the demographics of business owners evolve, the needs of SMEs are beginning to change, becoming more demanding in terms of personalised insurance products and customer experience. Therefore, the future of the industry is that younger generations will make up an increasingly larger percentage of these businesses, and listening to their needs now means being prepared for the future.
What are SMEs already doing?
In 2020, 43% of UK SMEs started offering new products and services adapted to new digital services, and 76% of UK SMEs stated that digitisation was a key aspect of their future viability in the wake of the pandemic. Since then, we have seen digital change become an increasingly strong reality for SMEs, however, insurers are not running at the same speed to adapt their services to these new demands, which is why InsurTech is the key to the future of the sector. The industry needs companies that already have advanced technology to offer the service their customers are already demanding, while at the same time being able to improve their benefits and avoid the premium leakage .
Conclusion
Therefore, the future of the commercial insurance sector depends on technological advances that can incorporate the requests of younger and more digital customers and modernising the system for updating policies to avoid insurers also increasingly facing greater risks or premium leakages that damage their economic benefits. At Wenalyze we take advantage of the latest technology to provide the insurance sector, so that when it comes to updating their policy the process is agile, fast and secure for both, the customer and the insurer, improving customer service and adjusting commercial insurance premiums to the actual activities of the insured.
If you are interested in improving your services and anticipating the future of the sector, please contact us.
