Small business clients of brokers struggling with the impact of COVID-19 are more interested in “short-term relief” than deferring an annual payment by six months, MGA Insurance Brokers says.

As reported previously, major insurers including Suncorp, IAG, QBE and Allianz are offering SMEs a six-month deferral as part of a range of options designed to help customers cope with the effects of virus shut-down measures.

But MGA MD Paul George says there has not been wide take-up of the offer, particularly among micro-SMEs.

“We have gone to all of our brokers and asked them to let us know about any particular hardships,” Mr George says.

“We are trying to be pragmatic and have a conversation, and we are sharing the information with our insurer partners.”

Short term relief on premiums where the risk has reduced would be of greater benefit than delaying payments by six months, Mr George says.

“It has got to be looked at on an individual basis as every risk is different,” he said.

“We appreciate an insurer can’t just change its philosophy around underwriting, but if clients can get some relief then maybe they don’t have to cancel their cover.”

Adelaide-based MGA broker Ashley Ward has a large portfolio of micro-SME clients.

“Generally speaking, the clients we have put the [deferral] offer to have declined it,” he told insuranceNEWS.com.au.

“I appreciate the sentiment of what the insurers are trying to do but the clients don’t want a larger bill in a few months’ time. They want to make payments on the way through, and make changes to their policy if they can.”

SME insurance specialist BizCover reports similar trends.

“Our experience has been that very few SMEs through the BizCover platform have wanted six-month deferral of premium,” CFO Simon Schwartz told insuranceNEWS.com.au today.

“Most affected customers have wanted either a reduction in premium, reduction of cover to reduce premium, a short-term (approximately 60-day) deferral of premium, or just cancellation of their cover.”

BizCover’s latest SME Insurance Price Index, which is based on about 100,000 clients, shows insurance rates have remained flat for a third consecutive quarter, with notable declines across the trades and retail segments.

BizCover MD Michael Gottlieb says the figures will reassure SMEs dealing with difficult economic conditions.

“Prices in the retail sector have been decreasing since the second quarter of last financial year and fell a further 7% this quarter,” he said.

“Key sections of business pack insurance that are frequently used by retailers such contents, glass and theft all showed noticeable price declines.

“The pandemic has arguably had the most significant impact on the retail industry and the continued downturn of business activity in that segment will likely put more downward pressure on rates.”