Small and medium-sized enterprises (SMEs) are economically important both in Germany and throughout Europe. They represent the vast majority of activity, not only in terms of the number of companies, but also in terms of employees, turnover and profits, so it is obvious that this market is also of interest to insurers. Commercial and industrial insurers thus have countless opportunities to attract new customers and thereby increase their sales. However, this particular sector is also undergoing great change, and as a result, many conventional products and distribution channels are considerably less productive than they once were. However, with some appropriate innovation, it is very possible to exploit the rich potential of this market.
A strong inclination to favour digital processes
In recent years, there has been a marked generational change in the SME sector. Until recently, the majority of business leaders were part of the baby-boomer generation. At the time they took up leadership positions in their respective companies, the internet and other digital forms of communication played a very limited role in the world of commerce. Insurance products for small and medium-sized businesses were therefore tailored to these entrepreneurs and utilised traditional forms of distribution. However, generational change has meant that numerous company bosses now come from the ranks of Millennials, or even Generation Z. They became familiar with digital media at an early age and use it intensively as the default mode for most of their business activities.
A market that is so far largely untapped
So far, very few commercial and industrial insurers have responded to this upheaval. Most providers still continue to offer their classic products to SMEs. This situation presents innovative insurance companies with numerous opportunities. As this sector of the market is virtually untapped, modern products and digital distribution channels have huge potential. Investment in digitisation will make it possible to develop offers that meet the needs of this new generation of business leaders. Moreover, because this generational change will continue to play out over the next few years, demand in this segment will continue to rise.
This article was first published on LinkedIn.