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Embracing emerging technologies to serve micro SMEs

News article

Publication date:

10 May 2021

Last updated:

10 May 2021

Author(s):

Janthana Kaenprakhamroy, CEO, Tapoly

This article prepares us for the upcoming webinar on embracing emerging technologies in insurance for serving micro-SMEs. We consider the challenges faced over the past year and look at reasons to embrace emerging technologies.

A wide array of challenges have been felt across the insurance value chain over the past year. Customers have been facing unprecedented levels of personal and professional anxiety, lockdowns and budget constraints, and insurers and intermediaries have been facing communication challenges, capacity and staffing issues, restricted coverage and reduced premiums, among others.

One market segment that has been particularly challenged over the past year is small businesses. According to government research, in 2020 there were 5.7 million micro SMEs, which accounts for 96% of businesses in the UK. These have between 0-9 employees and form a bedrock for the UK economy. This is in addition to the growing gig economy which in 2019 was estimated to be 4.7 million people in the UK and had more than doubled in size since 2016. Despite micro SMEs being a considerable market segment, it is one that is traditionally more difficult for the insurance industry to serve as it requires additional manual processing time and increased data to assess risk, both of which quickly increase customer acquisition costs and reduce profit margins.

When these existing challenges associated with serving micro SMEs are coupled with the wider hard market challenges felt across the value chain, it becomes very difficult for the insurance industry to serve these businesses and still make a viable profit. This can then negatively impact the businesses in question who may continue to operate without adequate cover if affordable options are not available, causing more problems for the customer and insurer down the line.

So how can we overcome these challenges to better serve micro SMEs in particular?

Remaining flexible, adaptable and open to modernisation are all essential qualities for insurers and distribution partners during this period who are looking to access this market. Not only to deal with the challenges, but to also be able to continue delivering the best levels of customer service possible. Micro SMEs in particular require increased flexibility as they often do not fit neatly into certain professions or they need tailored products for certain time periods or jobs.

Embracing emerging technology is going to be essential to moving forward.

The pandemic has proved just how important technology is for both serving customers and for seamless business operations to ensure every element of the value chain remains connected when not able to physically be together. Cloud technologies have been relied upon over the past year for quick data access and storage, but this is only one example of where emerging technologies can be applied. Technology such as AI, ML and automation can enhance data usage and sharing abilities further. This makes it much quicker to serve each customer which is critical when accessing the micro SME market as the profit per head is smaller. The technology has the capability to make customers almost self-sufficient if chatbots and real time pricing are used during the acquisition process.

Looking to the future, it is clear that the insurance industry and micro SMEs continue to have some challenges ahead. The hard market conditions and economic effects are likely to prevail for the immediate future, however with continued cooperation between insurers, intermediaries, claims professionals and customers, we can continue to move forward. Emerging technologies that are embedded across the value chain, within underwriting, distribution and claims, can aid this communication and cooperation tremendously.

If you are interested in learning more about how current challenges are impacting the wider insurance industry, building your skills and knowledge on why we should be embracing technology in insurance and learning how we can practically apply technology such as AI, ML and big data across the value chain, then sign up to the webinar on Wednesday 26th May 2021 at 2pm. The panel is moderated by Matt Hall, CII, and features Janthana Kaenprakhamroy, CEO, Tapoly, Melissa Collett, Professional Standards Director, CII, William Quibell, Head of Supply Chain (Household), Admiral Group and Mandy Hunt, Chief Underwriting Officer, RSA.

  

Learning objectives:

By the end of this webinar participants will be able to:

  • Understand the challenges across the value chain in serving SMES, Micro SMEs and freelancers
  • Discuss why we should be embracing technology in insurance, such as AI and big data
  • Build their knowledge on how technologies such as AI and big data can be practically applied to the underwriting, distribution and claims processes of Micro SMEs

Register for webinar here

Tagged as

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.

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