BizCover for Brokers has digitalised the brokering lifecycle of small business insurance
The Australian insurtech has streamlined once time-consuming processes by leveraging technologies such as AI and automation
Now brokers can get multiple quotes in minutes where it once took days, and their customers can enjoy more consistent pricing
Business insurance is a necessary part of life for over two million SMEs that operate in Australia, designed to provide protection for when things go wrong.
But for many business owners, navigating the complexities of the notoriously opaque SME insurance market is fraught with inconsistent pricing and general confusion.
For brokers, low-profit margins coupled with arduous, time-consuming manual processes provide little reward for operating in this critical space.
Luckily for brokers and business owners alike, Insurtechs such as BizCover for Brokers (B4B) are solving some of the problems of yesteryear and propelling business insurance into the digital age.
“The way business insurance is conducted has changed little over time, it’s largely conducted manually and is inefficient,” says Jane Mason, Product and Channels Manager at B4B.
“We have changed that. Digitalising the brokering lifecycle not only makes SME insurance more lucrative for brokers, but it provides greater access to insurance and promotes transparency and competition.”
Profits at volume
While the wider Australian insurance sector continues to pull in billion-dollar profits even amid the pandemic, business insurance has generally been seen as less profitable than other insurance sections.
Typically, SMEs do not need bespoke negotiated products that are often required by their larger counterparts with many SME’s purchasing generic products at lower premiums.
“The average premium for an SME is somewhere around $1,000 and when you consider the broker is only making 15%-25% of that, it’s not a lot of money to justify approaching multiple insurers, getting multiple quotes, making the comparison and providing the service.”
Jane says the process from start to finish can take days or even weeks because of the manual processes between the client, broker and insurer. Unlike personal lines, there is a lack of connectivity in business insurance.
“With health insurance, I can go online, type in a few details, and within minutes I can have access to multiple options with fairly consistent pricing,” says Jane. “This did not exist in the business insurance industry.”
But now, emerging technologies such as AI and automation has enabled the B4B platform to support the entire business insurance lifecycle.
“We’ve simplified and streamlined the process. Brokers can compare quotes from multiple insurers in minutes, bind policies, receive policy documents instantly and manage their clients policy online,” says Jane.
“By reducing the time and labour needed to transact business insurance, we’ve made it possible for SME insurance to be profitable for brokers and to free up their time to focus on building relationships, servicing their customers and growing their business.”
Creating sustainable pricing
While the B4B platform has incentivised business insurance for brokers, it has also contributed to more consistent pricing. The lack of connectivity in business insurance results in a lack of data across the industry which in turn leads to pricing fluctuations as insurers act in silos and pricing is experiential. “It creates massive inconsistencies in pricing. A broker could approach different insurers for their SME client and get quotes that are not $10, not $20 but thousands of dollars different,” says Jane.
In addition to the pricing inconsistency, SMEs are not protected from the claims experience of their larger counterparts when in fact in our experience, micro and SME businesses do not experience the same loss ratios.
“There is no ring-fencing of the SME experience, and it’s not an efficient way of doing business,” says Jane. “The digitised and automated process of BizCover for Brokers allows us to ringfence SMEs and to collect industry wide data across multiple insurers.”
This stable pricing is shown by the BizCover SME Insurance Price Index, which only saw a quarterly increase of 0.5% compared to the 18% experienced across commercial insurance premiums globally.
“Essentially, by automating SME insurance across multiple insurers and multiple products, B4B helps to ensure access to insurance while providing transparency, consistency and pricing stability.”
From the Dark Ages to the Digital
The BizCover for Brokers platform is a shining example of how technology can vastly improve sectors that have historically lagged.
“It’s the way the insurance industry is going– and it’s a good thing,” says Jane.
“It’s allowed us to make an opaque industry transparent, increase profits where there was little and create contestability where there were silos.”