Brokers need to adapt the way they operate to capture businesspeople who want to research and do business online, a report suggests.

Vero released its latest SME Index, which showed that more than three-quarters of the owners of small businesses in New Zealand were comfortable performing their business administration tasks online.

They were increasingly doing online research to look for business insurance.

The report said there were differences between businesspeople who had bought their last insurance policy through a broker and those who had purchased direct.

Almost two-thirds of broker clients said they were extremely comfortable carrying out business admin tasks online, compared to just under half of those who were direct buyers.

“This insight is key for brokers to understand how their business caters for the digital age, and to ensure they meet customer expectations in the online environment.”

Overall, three-quarters of all businesspeople said they were somewhat to extremely comfortable online.

“When presented with a list of potential benefits of using online channels, our respondents made it very clear that ease and convenience are the overwhelming reasons to use the internet, ” the report said.

“For example, 62% like the fact that they can access information and research online at any time, and a further 56% appreciate that they can access it from anywhere. Speed is another important benefit for many. Cost is one of the lowest ranked benefits, with only 23% selecting cheap prices as a reason to use online. Ease of comparison and having less pressure to buy rank only slightly higher.”

The report said convenience was an even more important benefit of online for broker clients.

“This suggests a significant opportunity for brokerages to think about how they can utilise online channels to make their experience more convenient for clients,”  Vero said.

“In contrast, direct buyers are significantly more likely to like online for the lack of pressure to buy and the ease of comparison, suggesting that their use of online may be linked to a desire to be independent and do things themselves. This also suggests that they are shopping around and aren’t driven to buy immediately.”

The main drawbacks of online for SMEs stemmed from a lack of trust. 

More than 40% of SMEs worried about the risk of errors in online channels, while 38% felt that online was impersonal and 37% were concerned about the risk of their business information being leaked. 

“Significantly for brokers, one-third consider the lack of advice of online to be a drawback. This suggests that there is a strong role and opportunity for brokers to leverage personal understanding, advice and trust that SME customers value.”

Just under a quarter of all SME owners said they were very comfortable identifying the appropriate insurance for their business online, compared to 29% who were very comfortable making amendments to the type and level of their cover, 33% asking questions or making inquiries, 38% lodging a claim, 43% renewing a policy or getting a quote and 54% very comfortable updating their details.

“There is some evidence that, for a small number of direct buyers, their willingness to use online has been a factor in their shift away from brokers,” the report said.

“Specifically, of those who claim to be using a broker less than they used to, around one in three say that this is because they prefer online channels.

“This suggests that there is a substantial opportunity for brokerages to provide their clients with the convenience and ease of online because it is increasingly an area that meets clients’ expectations and needs.”

Vero said brokers should understand clients’ digital expectations. “Digitally managing administrative aspects of their business is now the norm for all types of businesses and ages. There is the potential for brokers to add value and build a customer value proposition for tasks SMEs aren’t comfortable doing online.”

By increasing their options to interact with clients online, brokerages could meet the needs and preferences of a large group of SMEs, Vero said.

 “Research still indicates that SMEs are looking for advice from brokers to help them navigate the complexities of insurance. SMEs value brokers who take the time to understand their business and tailor insurance options for their needs.”


SMEs are happy to do online research for different insurance options. And with many more online insurance competitors, it is hard to compete with ease and convenience.

• Define and build your own unique value proposition. 

• Understand customer drivers, so you can determine where is best to invest online (for example, search engine marketing or
digitising administrative tasks). 

• Understand that SMEs value the power of advice and broker relationship.”

December 2018

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