QBE: shock findings show a third of SMEs would go direct

Three quarters of UK SMEs say competitive price is key factor in buying business insurance and a third would rather buy business insurance direct, rather than via a broker.

These - and the fact only 16% of UK SMEs will look to the insurance industry for advice in the first six months of 2010 - are among the findings of a new survey by QBE.

Focus on price was the priority for SMEs across the UK, except in the Midlands and Wales where the financial security of the insurer was their main concern. In all other UK regions, including London, the financial security of the insurer was the second most important factor, after competitive price.

In order the top seven factors were competitive price (75%), financial security (68%), specialism in your industry (54%), proven claims track record (53%), broker recommendation (45%), recognisable brand (36%) and additional no-cost benefits (26%).

QBE added the survey found that a "surprising" third of UK SMEs would be happy to reduce the cost of buying business insurance by going direct to an insurer and thereby avoiding broker commission. A further 1 in 10 were uncertain of the benefits of a broker service, suggesting that this is not being adequately explained by their current supplier.

The survey also found that only 16% of UK SMEs intend to look to the insurance industry for advice in 2010, with only 11% looking to insurance brokers and a mere 5% to their insurers.

QBE said this reluctance may indicate that, while SMEs may understand their legal commercial insurance requirements, many may not view their broker or insurer as a source of practical advice on mitigating risks to their business.

Terry Whittaker, managing director, national division, QBE Europe, commented: "Given the current economic environment, it is unsurprising that price is the top priority for UK SMEs. However, as an industry there clearly is work to be done in explaining the added value that a quality insurance service from brokers and insurers can deliver.

"With SMEs unable to absorb significant rate rises and insurers operating under a necessity to underwrite profitably, it is essential that insurers and brokers work together to promote the benefits of their offering."