SME businesses owned by people aged under 40 are less likely to use insurance brokers, new research shows.

Such groups are more likely to research insurance online and search for cheaper prices, according to the 2013 Vero SME Insurance Index.

About 61% of the business-owners and managers questioned for the index use brokers, but this drops to 44% among 18 to 39-year-olds.

Brokers must consider how to stay relevant with the next generation, the study of 885 SME owners and insurance decision-makers concludes.

“For them, the internet has become the default medium to gather and research information and to transact,” the report says. “[They] need to be given a good reason to do business by means other than the internet.”

Women are more likely than men to personally research their insurance needs, use the internet and forgo personal contact for a cheaper deal, the survey shows.

Attitudes to insurance have become more relaxed as memories of the 2011 catastrophes fade, but Vero warns complacency is a risk.

Three-quarters of respondents expect premium rises, and many expect to reduce their cover or switch insurer or broker.

The industry should increase the value of its offering and better communicate the benefits of using a broker, Vero says.

It is not all bad news. Almost three-quarters of broker clients have been with their current provider for more than five years, showing “the remarkable stability of… broker/SME relationships”.

Most broker clients are satisfied and can see the benefits of the relationship, such as saved time, access to specialist expertise and the best prices.

Also see ANALYSIS