Watch the webinar
- Deborah Fraser, Regions Director, CBI (Chair)
- Flora Hamilton, Director of Financial Services, CBI
- Julia Graham, Deputy CEO, Association of Risk Managers and Insurance Officers
- Anthony Gruppo, Chief Executive Officer, Marsh Commercial.
- We know that SMEs have had problems with insurance, and we have established an insurance working group.
- Many firms found they were not covered for a forced lockdown – with only around 10% of policies thought to cover it.
- The CBI has been very active on Trade Credit Insurance (TCI). We want to see TCI as enabling the ‘better flowing of finance’ as firms take their staff off furlough and look to resume operations.
- We’re hearing reports that insurance renewals are onerous, with prices going up and, in many cases, reduced cover.
- We’re working with major insurance firms to publish a guide on SME insurance next month.
- We have many SME members.
- Managing risk has always been part of doing business. This has not changed in a few decades. If managing risk (including insurance) is ‘parked to one side’ from the rest of your business, then risk isn’t being considered in an integrated way.
- Previously the Owner/Operator/Senior Management Team relied on experience, intuition, or luck in managing risk. There has been a move away from this for something more ‘systematic’. The other change is balance between risk and opportunity. Risk is not just negative; it is about converting opportunities too.
- It makes good business sense to manage risk. Those that manage risk best do best.
- What sort of things should SMEs be looking at?
- Supply chains
- Check your weak spots
- Key people – have contingencies been made?
- What laws and regulations do you need to comply with?
- Intellectual property – often your most important asset.
- It will take courage to survive the current crisis. The UK is very creative, and this will be vital in getting through the crisis.
- When an insurance market looks at you as a business, they do not just look at the application, they also want to look at the narrative.
- My five top tips:
- Write a short narrative about what is special about your organisation
- Do not just let the insurance market see your assets/holdings, they need to see you – put your personality into your submission
- Put together quick video clips that show the organisation/staff/workplace culture to add personality and depth to your business
- Do not cut your coverage. If you are underinsured, this will be remembered when you try to ‘re-enter the insurance market’.
- Think about your application – what will it look like, how will it be remembered?
- SMEs are the backbone of the country. Do not wait for someone to give you the answer, use your creativity and ingenuity to find solutions.
Key questions we answered:
- Julia, will there be any relief insurance if businesses want to delay payment of an insurance premium to help their cashflow?
- In certain ‘classes’ there could be premium relief (in terms of the amount already paid). But there’s no blueprint of what the whole industry is doing.
- Do not ‘NOT’ pay – ensure you keep paying your premiums.
- If you are having problems speak to the broker/insurer – they want to keep you as a customer! There will be a will in the market to help.
- Julia, if a business has changed because of the effects of Covid-19, what should they be doing in terms of their insurance to reflect this change?
- Look at what is going on in your sector/industry/locality:
- Adapt in the context of the environment you are operating in
- If things have changed – consult about your insurance needs/requirements
- Have a great radar!
- Keep a regular eye on things.
- Do not just sit on a problem, speak to your advisor as soon as possible to get it under control.
- Anthony, what can an SME do to improve their position to insurers?
- Follow the earlier tips.
- But one of the best things you can do is look at the uniqueness of your organisation. Make everything ‘personal’.
- Anthony, how important is a strategic plan to an SME?
- Insurers want to see a goal/objective/action/owner.
- Quantify the steps and actions you will take to achieve your objective.
- Show a line of accountability to each step.
- Keep the plan updated.
- Flora, what is the remit of your Insurance Working Group?
- The remit is to have detailed conversations with insurance firms, brokers, and associations about what’s happening in the market, to gain an nderstanding of how we can move together to get improvement for businesses.
- A big issue we’re looking into is government guidance and its interpretation. How a firm interprets the guidance will dictate how they approach risk management.
- Firms looking to reopen will need to show they understand these as they will be opening back up in the coming weeks.