Clients of brokers using the BizCover for Brokers platform continue to benefit from consistently low SME insurance prices despite soaring premiums in the wider market.
The BizCover Insurance Price Index only increased 0.25% over the latest quarter, standing in sharp contrast to the 15% increase in commercial insurance premiums experienced globally, according to Marsh’s Global Insurance Market Index Q3 20211.
And while global premiums have continued to rise for the sixteenth straight quarter1, B4B brokers can enjoy the relative price plateau, instilling confidence back to clients.
“Our investment in the latest technology has allowed us to create this unique benchmark to compare relative pricing across a range of insurance products and industry sectors for Australian small businesses,” says B4B Product and Growth Manager Jane Mason.
“This not only provides valuable insights to brokers, but the data can be used to promote steady pricing.”
A wider perspective
The BizCover Insurance Price Index has enjoyed a remarkable run of stable pricing ever since its inception in 2012.
And while this is the fourth consecutive quarterly increase, the Index currently at 0.93 remains below the index pricing standard of 1.0.
What this means for brokers and their clients is that insurance for small business transacted through the B4B platform, across all sectors, remains cheaper on balance than it was nearly 10 years ago.
“In the short-term, prices have risen but when you take a wider perspective you see how consistent it has been,” says Mason.
Mason says part of the reason for this long-term stability is because B4B, using years of technology innovation, has automated small business insurance to provide connectivity in an often-disconnected sector.
“A lack of connectivity and therefore data in business insurance leads to massive inconsistencies in pricing as insurers act in silos and pricing is experiential,” says Mason.
“Now, small business insurance for multiple products from multiple carriers across 6000 occupations is transacted through our platform, promoting transparency and contestability and for the first time allowing for industry wide data collection.”
Another factor contributing to pricing stability is the platform has ringfenced the SME portfolio from the losses that happen in the middle market and the corporate space.
“Because we have segmented insurers’ SME portfolio through the platform, when an insurer suffers losses from the wider market, it’s not affecting pricing through the B4B platform because we’ve taken that out of the equation,” says Mason.
“BizCover for Brokers aims to give a competitive advantage to brokers that use the platform.”
By Industry and Product
The BizCover SME Insurance Price Index is comprised of three industry sectors – Professionals, Trades and Retail – who have purchased business insurance through the B4B platform.
By only focusing on SMEs and by incorporating the latest technology, the B4B analytics team can dive deeper into the data and provide unique insights within each sector.
“Not only can our tech capabilities help keep the Index stable, but it can also provide brokers with a more meaningful perspective of what’s happening in each industry,” says Jane.
For example, the drop in the Retail (1.2%) and Professional (0.5%) sectors mostly offset the rise in Trades (1.3%) over the quarter.
B4B can even provide information on products, such as the indexed cost of Glass insurance for the Retail sector businesses fell by an average of 8.3% when compared to Q4 of last financial year. This takes Glass insurance to pricing levels not seen since 2016, with the index falling for six consecutive periods.
Smaller reductions were seen in Contents and Theft insurance as well, contributing to the overall reduction of 1.2% or the Retail sector business insurance pricing index over the quarter.
Across the other sectors, Trades had an increase in the price of Public Liability (0.9%) in the most recent quarter, while Professional Indemnity in the Professionals sector experienced a drop of 0.9%, which is customary for this time of year.
“Digging deeper into the data explains what industry and products are rising or falling,” says Jane. “While there are pockets of larger movements across the Index, overall, it has remained stable and dependable which is good news for brokers and customers.”