Zurich has teamed-up with market-leading analysis and research group the Economist Intelligence Unit (EIU) to identify and explore common issues affecting the diverse SME sector. Director of SME at Zurich, Richard Coleman, talked to Insider about the research’s value for brokers and why Zurich decided to join forces with the EIU.
Q: Why did Zurich decide to work with the EIU on SME research?
A: SMEs are going through perhaps the most significant period of change in decades and as a forward-looking SME insurer we want to be at the forefront of understanding the risks and broader business environment.
The Economist Intelligence Unit (EIU) provides market-leading analysis of the business environment and has worked closely with SMEs, particularly around business risk. With SMEs accounting for around 99% of UK companies, it is a tremendously diverse sector with huge variation in there and it is difficult to generalise. At the same time there are macro trends that are currently affecting the majority of small- and medium-sized businesses in some way, and longer-term trends that will similarly affect the sector in the future. This work aims to bring all of this into sharp focus.
Q: What are the research areas and how were these decided?
A: The strand running throughout this work is risk and protection – a broad risk focus, while looking at some of the big picture issues, and those that present longer-term challenges.
We will find the real life issues facing businesses, what they mean for the exposures and liabilities SMEs face, and how they can manage them.
The first report, published in April, looks at how SMEs are adapting in tough economic times and the liabilities this raises; the second focuses on technology – including the rise of mobile computing and cloud services and the questions these raise; and the third report focuses on the longer-term dynamics brought about by demographic changes, such as the UK’s ageing population and high youth unemployment rate.
Within these research themes, we will find the real life issues that businesses face around the core issue of risk: what they mean for small businesses on a day-to-day basis – and what they mean for the exposures and liabilities SMEs face and how they will manage them.
Q: How is Zurich using the findings?
A: Very simply, what is driving this work is the focus on sharing insight that benefits the broker community. When we have looked at the areas for the EIU to research we have started from the question: will these findings benefit brokers? Events streamed live online will provide an opportunity for the broker community to engage with the findings and share their perspectives.
There is a really great opportunity for brokers to increase their understanding of the challenges their customers face and their perceptions of the impact some of these trends may have on businesses in the future.
And there is a broader point for our proposition. If we are finding that certain technology risks are common for our customers, that could influence innovation in our products and services in the future. These could be broader concerns or changes affecting specific industries, such as the development of 3D printing in manufacturing, and looking at whether we have appropriate cover options in place.
Q: Which areas of the SME market are you most interested in?
A:We are a broad church SME insurer and try to cater for all of the 99% of UK companies that fall into this category, but at the same time we are interested in those issues that are materially affecting SME businesses. This might mean exploring the transformation that is taking place on the UK high street, the fact that small manufacturing businesses are increasingly part of a global supply chain or the implications for professional indemnity insurance with rising numbers of sole traders.
Q: What specific value can brokers find in the EIU work?
A: There is a really great opportunity for brokers to increase their understanding of the challenges their customers face and their perceptions of the impact some of these trends may have on businesses in the future.
Sign up to BIBA 2013, where Richard will be co-hosting a seminar on risk and resilience in UK SMEs, available to all attendees.
Of course, some in the market talk about SME just coming down to price – but what this fails to recognise is the importance of the role of the broker. With the significant challenges and changes facing SMEs, brokers are in a position to demonstrate their value in identifying risks and the protection required.
This work is drawing out the changing risks for SMEs, with implications for how brokers manage their businesses. We recognise that brokers are engaging with different types of content in different ways. With the SME Risk Horizon work we are aiming to create debate so brokers can explore these issues peer-to-peer and SME businesses share their perspectives. We want this to be a long-term discussion that can provide on going value for brokers.
Q: How can brokers access the research findings?
A: In addition to the reports themselves, a series of events are taking place across the country, which will be streamed live online. Using the EIU’s Wavecast platform, brokers will be able to contribute to the debates live. I will also be co-hosting a seminar on risk and resilience in UK SMEs at this year’s BIBA conference, open to all BIBA attendees.
Richard Coleman is Zurich’s Director of SME. He joined Zurich when it was Eagle Star in 1997 as a personal lines trainee. After roles in project management, strategic planning and the CEO office, he was director of a successful personal lines brokerage. In 2004, he returned as Head of Navigators & General and has since held a number of senior Personal Lines and SME roles.