‘Intimidated’ and ‘scared’ advisers fuel SME protection gap

“In business protection, you have to be 100 per cent accurate, because trust forms and legal parties are involved. If you get protection wrong, you’re liable. Advisers don’t want to take on the risk.”

Marriott also highlighted the fact “no-one advertises about business protection” like they do personal protection.

“You’re trying to talk to SMEs, but they don’t have a clue what you’re talking about, so you’re immediately on the backfoot.”

He continued: “It’s an education piece on both sides [insurers and advisers]. Most problems in the industry can be solved by education and learning. There’s a lack of knowledge everywhere, and that’s where most of the problems are arising.”

Kay Ingram, director of public policy at LEBC Group, thinks advisers are missing a trick in the way they position the product. “Employee benefits should come hand-in-hand with business protection. It’s not just about the insurance product, it’s a completely holistic piece.”

She continued: “It’s up to advisers to have a grown up conversation. Business protection payouts are not just a lump of money.

"It will help tide a business over, but advisers need to be asking what other risk mitigation measures they can take to make sure their business isn’t as reliant on X director or Y employee.”

Ron Wheatcroft, a vice president at Swiss Re, said the reinsurer was keen to see the business protection market grow, which he said was currently “woefully unprotected”.

“The value is there and intermediaries have a chance to shine,” he added. “But right now it tends to be put in the silo between personal and group cover.”

Swiss Re is working with the British Insurance Brokers' Association to produce more content around the topic to educate advisers. “They aren’t going to become experts overnight,” said Wheatcroft.

“We’re very keen to support providers in the sector and increase demand, as frankly the numbers [for business protection sales in 2020] were disappointing.”