The first tranche of results from Vero’s annual SME Insurance Index earlier this year made sobering reading for brokers, showing that demand for their services has declined.

The second tranche highlights opportunities for brokers willing to take on the challenge.

Figures from the earlier issue show the proportion of SMEs buying insurance through a broker fell to 31% compared with 40% in 2013, amid digital disruption and a trend to buy direct.

The challenge for brokers is to reverse the trend and find niches that offer advantages for both sides.

Vero’s latest report looks for the first time at SME owner motivations, identifies insurance gaps and opportunities, and makes it clear brokers need to be on top of their game to win over the most promising clientele.

The group identified as having most potential is “business builders”, who want to achieve a long-term goal such as creating an empire, leaving a legacy or creating a saleable asset.

They tend to be younger, have the highest average business revenue, are significantly likely to have growth ambitions and demonstrate a degree of forward planning.

Only 27% of the group exclusively use a broker, so there is clearly an opportunity for intermediaries.

But the survey also finds business builders are significantly less likely to be satisfied with their broker than other SMEs. Only 55% of the group score their broker eight or more out of 10 for overall satisfaction, compared with 66% among all business owners.

“Part of the explanation for this may lie in the expectations they have of their broker,” the Vero report says.

When asked about broker tasks they consider important, they are more likely to nominate areas that require greater expertise, such as in-depth information and analysis, assessing risk profiles and providing advice on broader financial services.

Business builders also want more contact than other SMEs, with 79% desiring to see their broker face to face at least once a year and 59% expecting a phone call every few months.

Overall, they are more demanding than other owners, and to attract and win them as long-term customers brokers must show they can offer the desired expertise and high levels of service.

“Ultimately, the message to brokers remains the same: to attract and retain the best SME clients, brokers need to demonstrate the value they can deliver to businesses beyond a transactional relationship,” Vero Head of Commercial Intermediaries Anthony Pagano says.

Generally, owners looking to grow their businesses present opportunities for brokers, but they are also typically from a younger demographic more inclined to eschew the advisory channel.

Vero’s first tranche of data, released in March, shows 34% of respondents aged 18-39 use a broker, compared with 43% of those aged 40-plus.

About 72% of respondents aged 18-39 say they want their business to grow, compared with only 40% of owners in the higher age bracket.

In other findings, the survey shows SME owners are often not as well protected as they think, and may not be aware they would benefit from insurance advice.

More than half of the respondents to the survey say they have clear succession plans and contingency plans in case they are unable to work, but generally they don’t have business interruption cover.

“This significant gap is an opportunity for brokers to explain what business interruption insurance means to clients who want to protect their business for future growth,” Mr Pagano says.

Overall, half of SMEs want their businesses to grow, while 39% want to remain at the same size and 11% are looking to wind down.

The larger the business, the more likely it is to have growth ambitions.

Vero recommends talking to clients about their growth plans, tailoring advice not only to where they are but where they want to be, and discussing contingency planning.

“Consider discussing longer-term issues such as succession planning,” the report says. “While these have less direct relevance to insurance, showing interest in your clients’ broader business direction can help deepen your understanding and help in earning trusted adviser status.”

Two further tranches of survey results will be released this year, examining the changing attitudes of businesswomen and taking a broader look at how SMEs use financial services.

For brokers, challenges from technological upheaval are likely to continue, and there are no free rides on the horizon.

But those that pursue opportunities and adapt to changing client attitudes and needs will have brighter futures. And often the prospects that are hardest to win can offer the greatest long-term rewards.