The growth of online SME business

Changing old habits is a tough task. But for a new player in the online SME market, that is exactly what it aims to do.

Coverzones, a new online intermediary, says it can transform the commercial lines market by bringing SME business straight to its door.

Call it an aggregator, a managing agent or even a broker, the new company encompasses all of those factors into what it describes as a unique model.

Simon Ball, chief executive of Coverzones, says SME clients have had no choice to use regional brokers because they have no other options.

He is confident that there will be no hesitation from consumers.

“The myth that SMEs do not want to buy insurance online is exactly a myth,” he says.

“We started the idea nearly three years ago and people told me selling insurance online was something you could not do. Will the customers come? We have done enormous amounts of research to confirm to us that they will.”

The commercial lines market has come in for some criticism of late, after suggestions that it has been left in the wake of the personal lines market and insurers should use that as an example too lower the cost of distribution rather than commissions.

Ball says this model will lower distribution costs and commissions, particularly for cases that offer lower premiums.

“The insurance market place recognises where the market is going to go,” he says. “It also recognises that particularly for the low value premiums the current business model does not work.”

He admits: “I am 100% confident and the insurance industry is ready to work with us. It is ready to go.

He adds: “Fees are too high at the moment and I understand insurer concerns.”

SME Insurance Services, the company which developed the Broker2Broker portal selling online SME products to brokers, also has a direct arm – SMEi – selling cover to SMEs.

Coverzones, which completes the transactions for clients instead of passing them on to an insurer, insists that the model could be the first steps to a commercial lines revolution.

“We are absolutely confident that the proposition is a win for everybody,” Ball concludes.

With the commercial market recently described with phrases such as “archaic”, the news that it may be beginning to turn will be music to the ears in some quarters.