New Zealand brokers should spend more time nurturing young, new and smaller clients to develop valuable long-term relationships, according to Vero’s final SME Insurance Index report for the year.

A survey on client satisfaction shows only 45% of younger business owners (18-49 years) are highly satisfied with their broker, compared with 63% of over-50s.

About 66% of businesses with 6-19 employees are highly satisfied, compared with 53% among micro-companies (self-employed to fewer than five staff).

The longer the relationship with a broker, the more likely clients are to be satisfied. 

“Almost two-thirds of SMEs who have worked with a broker more than five years are highly satisfied, compared with only 42% of those who have spent less time [together],” Vero says.

More than one-quarter of dissatisfied clients think their broker is their insurer. Only 14% of satisfied clients think this, suggesting knowledge of what a broker offers is important.

The more satisfied a client, the more positive their perception of price is.

For example, highly satisfied SMEs believe they pay the same or less through a broker than if they went direct to an insurer; 41% of dissatisfied clients believe they would pay less direct.

“Price will always be a hot topic in insurance, but is highly driven by perceptions, and this means managing perceptions of value versus price is a key factor for brokers to consider.”

Vero says brokers should explain pricing so clients understand exactly what they are paying for, and help them understand the value of their insurance. It is also crucial to understand customer needs from the outset.