Insurance Education for SME with Donna Scully

In our most recent podcast Nicki Crabb , Head of SME and Schemes Trading was joined by Tom Hepworth , our Research and Insight Manager, as well as Donna Scully , joint Owner and Director at Carpenters Group , who are one of the UK’s leading providers of insurance and legal services. In the podcast, Insurance Education was discussed following some research we have conducted featuring 190 business owners. They were asked a variety of questions about how we, as an industry, can improve insurance understanding.

Accessibility

From our recent research we found that half of all sole traders were not insured. One of the key reasons for this was a lack of understanding of business insurance. For example, one in three sole traders believed a business doesn’t require insurance until it starts to make a profit, or they start to employ staff. In the insurance industry, we want customers to understand insurance, why you need it, and for it to be accessible to everybody.

Small businesses and sole traders are at risk if they don’t have the correct insurance in place. Anything can happen in the workplace, and as a business, you will be held liable should something happen when carrying out your work. Even something as small as spilling paint can have huge consequences, somebody could slip, or you may have damaged somebody’s property. However, having the correct insurance in place would cover against this.

Donna explained when Carpenter’s first started out they were just five people and didn’t consider the risks as much as they should, but then they seeked the help of an insurance broker. The broker helped to guide Carpenter’s and taught them about what they needed to look at in terms of protection and insurance. Another point Donna made is that when starting out in business, you tend to look at areas where you can save money, this could be on be insurance. This of course could leave a business exposed when needing to make a claim.

Support

From our research, we found that two in five business owners require additional support when it comes to business insurance. The same question was asked regarding car insurance and home insurance, only one in five said they required additional support. A further one in six said they lacked confidence in choosing the right product for them. What we’re seeing from this is an increase in business owners trying to purchase insurance themselves with a goal of cutting costs. In doing so, they’re inadvertently purchasing a policy that, most likely, isn’t meeting their needs as a business, or their valuations could be incorrect, leading to them possibly being underinsured.

Neurodiversity

In the research conducted, we also found that one in six SME business owners were neurodivergent, which is over the UK average of one in seven. The most common conditions noted from the research were dyslexia, ADHD, and dyscalculia. This shows there is a direct link between neurodiversity and business ownership. Neurodiverse individuals often have traits which are advantageous for business ownership, for example their entrepreneurship, resilience, creativity, and the ability to think outside the box, so it shouldn’t be a surprise that there is more neurodiversity in business ownership than the UK average.

However, neurodiversity can create challenges for people when dealing with insurance. Speaking to these business owners gave us some great feedback on how to work with and support neurodivergent customers, such as tailoring our support for neurodivergent individuals, e.g. allowing family or friends to support them with their insurance or take ownership of different interactions.

We are supporting neurodiversity through the introduction of consumer duty and a focus upon vulnerable customers. The key method we are doing this is through simplifying communications and processes. We understand how overwhelming the communications received from insurers, banks, and financial services can be. It is common goal for the It is great to see the Insurance industry starting to recognise this and put focus on increasing consumer understanding.

The three main areas we will focus on as an intermediated first insurer to improve accessibility for customers are:

1. Building awareness of the importance of using a broker when making a decision about insurance.

2. Ensuring the wording we use is simple and jargon free.

3. Creating mutually beneficial partnerships to improve outcomes for customers.