Why the future of SME insurance must be customer-centric and questionless

Purchasing insurance online remains a frustrating experience for the SME buyer. How can insurers put the SME customer back in control?

The SME insurance customer experience

In our last post, we explored how the SME insurance customer is changing: business owners today want to purchase business insurance in the same way that they purchase their travel or auto insurance: online, in one fast and seamless transaction, at a competitive price.

The scope of cover also remains a top priority for SME insurance buyers who continue to value the personalised advice provided by agents and brokers.

Here lies the essential challenge for SME insurers as they develop online products: provide frictionless online services that deliver the personalised cover and service that buyers want, at the right price.

Purchasing SME insurance: the Boogle story

To understand more about online SME insurance purchasing dynamics, we sought out quotes for a virtual business – leading software engineering company Boogle Ltd, which operates from a first floor premises in North London.

We entered Boogle’s details into several leading online business insurance platforms. These platforms typically require the buyer to answer upwards of 30 questions to quote, representing an evolution of traditional paper agent forms, rather than a digitally native tool. Across platforms, the average time to complete an online form is 9.5 minutes. With a bit of time and effort, these online channels would provide Boogle Ltd with cover for contents and employers’ liability. Here’s a typical result from a leading provider:



Based on our efforts we see three main sources of friction within these online systems;

  1. First, in contrast to most online transactions (which are typically hyper-transparent), the cost of different cover options is opaque, meaning the buyer cannot easily investigate and select the most appropriate cover. Price comparison with other carriers requires additional form filling.
  2. Second, the usability of these forms could be improved: questions and wording is framed in terms that make sense to the insurer, not the customer, and forms timeout with no obvious way to save and return.
  3. Third, relative to other online purchases, the forms are time-consuming to fill – they also typically require information that might not be available to a single person within an SME (e.g. payroll, revenue, prior claims, desired cover).

Our view is that existing online platforms don’t fully meet SME customers’ key needs: by delivering insurance that is fast, frictionless and fair.

Why do SME insurers still ask so many questions?

The answer has been the same for decades: questions enable underwriters to assess and price risk and to identify notable red flags to providing cover. The more questions asked the more relevant information the underwriter can collect.

Yet, this paradigm is becoming less true. In personal lines, companies like Aviva are promoting questionless home insurance. In health insurance Michael Natusch, Global Head of AI says Prudential only really needs to ask four questions to underwrite with >90% accuracy. We see countless examples of questionless customer experiences from other related fields such as automated loan underwriting.

For SME insurance, typical information gathered includes location details, construction type, fire protection, trade code and so on. Fortunately, modern analytic methods allow many of these rating factors to be inferred from external web data. External data can also provide additional, novel rating factors, which can be more predictive than those gathered through traditional question sets.

The case for SME questionless underwriting

It is our view that SME insurance isn’t working well for the insurer or the insured. Due to an overly complex and opaque process, the cost to deliver insurance is high for the insurer, and the process of obtaining insurance is time-consuming and confusing for the customer.

This needs to change to better meet the needs of today’s business owners. SME insurance buyers increasingly purchase online for their personal insurance and expect to for their business transactions too.

Many businesses currently use brokers to help them understand their needs and risks and to find appropriate cover. From the SME insurance buyer’s perspective, a broker removes complexity from the insurance transaction. Online channels seeking to sell direct to the SME insurance consumer should recognise the need to make insurance easy and transparent and look to incorporate this service into their digital offering.

Cytora builds products that help insurers to deliver questionless underwriting experiences direct to consumers, immediately to broker partners, or automatically to broker platforms. We also partner with financial services providers, including banks and professional organisations, helping to efficiently connect SME insurance buyers with capacity to help deliver fair prices to the SME insurance marketplace.

Done this way, the experience of buying SME insurance can become friction free.



In our next post, we’ll investigate underinsurance among SMEs and suggest how questionless underwriting can help ensure businesses are adequately covered.