SA's insurance industry as a gateway to better support small businesses

The COVID19 pandemic necessitated an unprecedented level of agility from South African small businesses. This in turn impacted the structure of the broader financial services sector. Insurers were called upon to go above and beyond in their servicing of businesses – a development that has shaped the future of insurance companies as partners rather than just product and service providers.

Offering insights on the role that insurers play in empowering and improving the operational efficiency of local SMEs is Jason Mellow, Head of Business Insurance at MiWay. In his opinion, “the pandemic left in its wake a different kind of South African business owner – one who prioritises value for money and chooses service providers based on their ability to ‘tick multiple boxes’ at the same time.

In response, insurers like MiWay have become integral role-players in growing their clients’ businesses, leveraging their expertise to offer informed advice and connect SMEs to a wider network of industry support services. We see this not as a passing trend but as a key evolutionary step in the growth of the industry as we endeavour to enable better, more comprehensive customer experiences.”

But how do we do this?

1. Embrace technology and the future of business insurance

According to findings by South Africa’s Financial Sector Conduct Authority, rapid technological development has prompted insurers globally to employ new technology such as drones, and to offer specialised coverage to emerging, platform-based businesses.

The new generation of e-commerce businesses face a specific set of risks that can be mitigated by tailored cover. This could include, for example, damages caused to stock in transit which may be caused by acts of vandalism or certain weather hazards. The increasing risk of theft on the road also poses a significant threat. Online stores may also have extensive warehousing facilities which need to be protected from multiple risks.

Also on the digital front, new technology such as telematics; which allows for the real-time monitoring and processing of data on the movements and condition of company fleets has increased the operational efficiency of both businesses and their insurers.

In future, similar telemetry technology systems will likely be rolled out into other areas which will need to have the ability to improve the risk analysis capabilities of insurers as well as their ability to offer competitive premiums and a more streamlined claims process.

2. Consider a new level of value for insured businesses

These, as Mellow asserts, are just a few examples of how the insurance sector is changing to meet the emerging needs of businesses. “With access to advanced technology and more accurate data, insurers are in a better position to expand their service offering to SMEs and make a measurable impact on the businesses they support.

Going forward, the value proposition of insurers should extend to other areas of support based on what we are learning about how the SME sector is changing. The real value of our insurance policies for small businesses now includes extensive advisory services and access to partners in our ecosystem.”

Illustrating his viewpoint, Mellow references examples like MiBusinessAssist – a business support service that is designed to reduce unnecessary operational costs. All MiWay’s business clients have the option to gain access to this offering, which includes services such as legal advice, admin assistance, an IT help desk, tender notification, license disc and traffic fine support, and digital marketing.

3. Insurers to provide vital business support

“We believe that businesses deserve more than cover from their insurers,” explains Mellow. “And given the increased competitiveness of the insurance sector, with several new InsurTech companies vying for market share, insurers need to invest more in SMEs in the interests of building longer-lasting relationships with business owners.

Ultimately, relationships are the insurance industry’s most valuable currency, so principles like trust will play an increasingly important role in how businesses relate and interact with brokers and insurers. Today’s SMEs demand a more holistic service offering that speaks to effective ways of mitigating risk as a whole rather than just specific aspects of risk.”

As Mellow concludes: “our clients trust us to support them in making decisions that will grow and sustain their businesses. With offerings like MiBusiness Assist, we can leverage the strength of our supplier network and serve as a source of credible services that go beyond insurance cover. We believe that this has played a pivotal role in how we’ve gone about developing our business products and services in the hopes of helping businesses to better navigate the complex risk environment.”