The British Insurance Brokers’ Association (BIBA) is urging brokers to do more to explain their services and demonstrate the value that they provide to SMEs. New research reveals confusion among small businesses about what constitutes advice - and where they should go to obtain it. 

The research found that SMEs who did not use brokers were confused about whether providers had searched the market and provided them with advice or information.

The research also established that small businesses that do use insurance brokers put great value on the service they receive. 

Eric Galbraith, BIBA’s chief executive, said: “It is important that brokers play a key role in informing SMEs in what they do and how they can help them. This is even more important during the economic downturn when SMEs are likely to focus more on price. Brokers need to differentiate themselves from other providers by demonstrating the value that they add, both in terms of advising on cover and support in the event of a claim.”

Key findings of BIBA’s research include:

There is confusion about what constitutes advice and where to go to obtain it:

-          Of the micro SMEs not using a broker; 33% of SMEs did not understand that they weren't receiving advice and were probably only being offered a single product

-          In spite of the apparent confusion, advice is highly valued with 96% of SMEs who used a broker stating that advice was important

-          Amongst both those who use a broker and those who do not, there is confusion as to where they can go to obtain advice; 63% of SMEs who did not use brokers said they received the service of identifying a suitable secure insurance policy and specialist advice when it is likely that a good proportion of them were mistaken.

However, insurance advice is valued by SMEs:

-          Advice is highly valued with 96% of SMEs who used a broker stating that advice was important

-          94% of those using an insurance broker felt the broker provided reassurance that they have the right cover in place

-          89% felt using a broker allowed them to focus on their business

-          85% felt using an insurance broker ensures they always have a competitive premium

-          81% that say that their broker identifies a suitable secure insurance policy and explains why it is appropriate for me with specialist advice

Delivering Value is the theme of the 2009 conference which will be held at Manchester Central between 13 – 15 May. 

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Notes to editors

1. For further information please contact :

BIBA press office:
Leighann Burtrand, Communications Manager
020 7397 0223
burtrandl@biba.org.uk

2. The Full ‘Value of Advice’ report is attached.

3. About British Insurance Brokers' Association

The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance organisation representing the interests of insurance brokers, intermediaries and their customers.

BIBA represents 2,400 insurance brokers and intermediaries, including 1,700 FSA authorised firms. Insurance brokers and intermediaries distribute nearly two-thirds of all UK general insurance. In 2007, insurance brokers and intermediaries generated £1.5 billion of invisible earnings and they introduce £22 billion of premium income into London’s insurance market each year.

BIBA is the voice of the industry, advising members, the regulators, the Government, consumer bodies and other stakeholders on key insurance issues.  BIBA provides unique schemes and facilities, technical advice, guidance on regulation and business support and is helping to raise, and maintain, industry standards. BIBA works closely with the Chartered Insurance Institute to provide training to those working in the industry and actively participates in helping the industry and its customers deal with some of the major issues of the day.

BIBA members provide professional advice to businesses and consumers, playing a key role in identification, measurement, management, control and transfer of risk.  They negotiate appropriate insurance protection tailored to individual needs and operate to a very high standard of customer service with the aim of ensuring peace of mind, security, financial protection and the professional advice required.