How to get the best SME insurance premiums?
We talk to Louisa Millington, SME Manager at Romero Insurance Brokers, about the current obstacles facing SME businesses. The cost-of-living crisis, inflation, and worker shortages have seen material and labour costs soar. As tools become more expensive, so too do the policies needed to insure them. Many SME businesses are struggling to balance the books, which is why having a dedicated broker – like Louisa – behind you is essential.
An expert in small to medium business operations, Louisa recognises the main challenges facing local enterprises. She works directly with clients, building a personal relationship, and prides herself as someone to look towards when finances get tight. She understands that insurance perhaps isn’t at the forefront of a small business owners’ priorities, which is why her team provides a unique one-stop shop, offering tailored insurance solutions to those who perhaps have no experience in underwriting.
Louisa discusses the current state of the insurance market, how it’s having a knock-on effect for SME insurance premiums, and what businesses can do to get the best cover.
How is the current market affecting SME insurance?
“We are in such a hard market that premiums are going up. They are going up [on average] between 15-20% if not more. But when you are working for a medium enterprise, 15-20% is a big bulk of your turnover. Sometimes it can almost double with the cost of risks going up.
Trying to explain to someone already paying £200,000 it’s going up to £220,000, that’s 10%. But when someone only spends £500 and suddenly it’s £1000, how would you feel? Imagine your car insurance going up by that much – you’d be fuming wouldn’t you. It’s such a hard market at the moment.
When you are a sole trader – not turning over millions of pounds, maybe £40,000 a year – your insurance is taking up a lot of your income turnover. It has a big effect on that person. With a big business, it would only affect the organisation; but with an SME, it affects that person, their house, their vehicle, their assets, everything.
9 times out of 10, I deal with the person that owns the company. That’s the decision maker, the CEO, the CSO, the MD, the accountant; in an SME business you do everything. Plus this is somebody that doesn’t naturally know about insurance, so I’ve got to give them a lot of patience, a lot of information, and talk them through a lot of things. Whereas a company that turns over £200 million, they’d have a specialised employee, who’s probably been an underwriter, has dealt with insurance for 25 years. Instead, I have to be the expert, so they [the SME owner] doesn’t have to be.
We provide a comprehensive combined package policy that covers for quite a lot with minimal premium. It’s like taking an insurance policy, but thinning it down and going length-ways with it. Ours are not bulky, because they don’t have to be; it’s stretched over and incorporates most things within your business. Some policies offer £10 million liability cover, instead we offer between £2 million to £5 million. You still get the cover, you just don’t need £10 million’s worth.
Let’s say you are a Painter and Decorator, what’s the worst that’s going to happen? You’re going to paint the wall wrong, break a chandelier? You won’t need £10 million’s worth of cover.
“It’s not scripted. I’ve had a script at past brokers, and I kept getting told off because I didn’t read my script.
My boss would question me asking why I’d be on one call for 22 minutes, making notes on the system such as twin girls and supports Sunderland?
I’d say because if I want to speak to them again, I’d like to hear about these things, and sometimes they only call up once a year. I like a good chat! The way they do it is not a good customer experience.
The approach to SME insurance at other brokers is very corporate, stale, vanilla. Whereas, at Romero Insurance, it’s more like a chocolate chip ice-cream.”
What are the main challenges within SME insurance?
“Especially with new business, minimum premiums are going up. So SMEs can find themselves stuck between a rock and a hard place. To overcome these problems, we use our online facilities here at Romero Insurance Brokers.
We offer a one-quote-all system, using our new EDI system (Electronic Data Interchange). It allows me to get information in a snap, information which would have perhaps taken me all day in the past. It’s great and saves me so much time, I can get six quotes for someone within a working day.
However, because of the market, insurers are putting up their minimum premiums to help with the loss of claims due to COVID and business interruption. So, some of the insurers we use are only accepting a £10,000 minimum premium, useless for our clients who only require costs around £2,500. Therefore, clients will lean towards buying online with a comparison site. It can be cheaper, but online policies are very much off the shelf. We don’t believe half-baked policies like this, with all their exclusions, are suitable, and instead our clients require a tailored service.
My constant battle with underwriters at the minute is to get premiums down. I’m worried policyholders will go online, get the wrong cover, and when it comes to a claim find themselves in difficulty. So, the challenge is finding that balance between good comprehensive cover and premium costs. And that’s why making good relationships with 4, 5 or 6 core underwriters at different insurance companies is so important as an SME broker.”
How did you start your career in the SME insurance market?
“Before Romero Insurance Brokers, I worked at another insurance firm at their Centre of Excellence. I started in and have only ever done SME businesses. I finished all my CII qualifications and am enjoying running the team here.
Before insurance I worked in recruitment for 6 years, not forgetting my 2 year career break travelling. I also worked at Barclays bank for 4 years as the Banking Hall Manager.”
How does Romero SME insurance differ to other brokers?
“We are not a call centre! – is exactly how I would describe it.
With us, you have a dedicated account handler that will deal with your policy, start to finish and anything in-between. Where I worked prior it was far more similar to a call centre – you’d have your book of clients, not knowing who they are, pick up the phone and rattle through them, palming them off onto other people.
But here we are not a call centre. I know what Elliot’s got going on (Elliot Morley, SME Broker), what Georgia’s got going on (Georgia Richmond, SME Broker), I’ve helped look after every single SME client at Romero Insurance Brokers.
It’s not scripted. I’ve had a script at past brokers, and I kept getting told off because I didn’t read my script. My boss would question me asking why I’d be on one call for 22 minutes, making notes on the system such as twin girls and supports Sunderland. I’d say because if I want to speak to them again, sometimes they only call up once a year, I’d like to hear about these things. The way they do it is not a good customer experience.
The approach to SME insurance at other brokers is very corporate, stale, vanilla. Whereas, at Romero Insurance, it’s more like a chocolate chip ice-cream.”
Do you have a dedicated SME Insurance broker?
From beginning to middle to end, your business will be handled by the same person. We pride ourselves on our ability to build relationships with our clients and deliver on their expectations.
Read more of our information and get in touch with Louisa our SME Broking Manager today
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