With more than 65% of care and tech customers potentially missing out on a tailored proposition*, insurance brokers have a valuable opportunity to boost revenues by focusing on these two rapidly expanding sectors.
Published on 6 December, 2021
Most insurance brokers face the challenge of finding new business in a market dominated by a large volume of generalist competitors. But significant opportunities are emerging for them to do this by specialising in the care and technology sectors.
These are two of the fastest-growing sectors in the UK but are often poorly served by brokers because they haven’t recognised the specialist needs of care and technology companies.
Offering a more comprehensive solution to firms in these sectors will broaden your value, improve retention and drive new revenue streams. It will also reduce exposure to potential negligence claims should your advice fail to meet the specialist needs of a tech or care firm adequately.
The care opportunity and solution
The care sector is one of the UK’s biggest employers and is expected to keep growing rapidly as the population continues to grow and age. Projections show the number of adult social care jobs increasing by 32% to 2.17 million by 2035.
Richard Brooks, broker development director at Markel UK, says: “Every section of the care industry is growing, including domiciliary care, rehabilitation, children’s homes and care support businesses.”
Many of these companies face acute stresses and risks that require specialised insurance solutions. They also need support and expertise to help them act before these risks become claims. “Ordinary combined policies cover basic liabilities but not more nuanced areas important to the care sector,” says Richard. “For example, a standard commercial combined policy is unlikely to include abuse cover, or its abuse cover is ambiguous. Many care providers need very precise cover in this area.”
More specialised solutions, such as those provided by Markel, protect against the specific risks care providers face including abuse, medical malpractice, breach of professional duty, employee dishonesty, and volunteers. Quality providers also offer tailored services that help policyholders with day-to-day business and operational challenges such as employment issues, training and safeguarding and satisfy complex regulatory and compliance requirements.
The technology opportunity and solution
The UK’s technology sector is worth £184 billion and has grown by an impressive 160% since 2018. Innovative businesses in this space need innovative insurance that grows with them. But analysis by Markel UK shows 69% of technology businesses do not have appropriate cover.
Technology firms face many different risks to other businesses – including risks around contractual liability, product failure, cyber attacks, research and development interruption, and prototypes. Standard commercial combined policies do not cover these areas, which is why it is crucial for technology businesses to secure specialised cover.
“When finding insurance for a technology firm, brokers should ask whether the policy is fit for purpose in providing critical covers such as product failure, and research and development costs,” says Richard. “Companies in this sector should expect fit-for-purpose cover, great service from the provider, and claims to be paid. It’s a sad indictment of our industry that this is not always the case. But Markel wants to and will pay claims.”
Technology businesses will not only benefit from robust cover, but also from business support services. Richard explains that, at Markel, specialised cover includes the support from 24/7 advice lines staffed by Markel’s own solicitors, barristers and tax consultants; and its online Law Hub for legal and business support materials.
“Technology firm owners may be brilliant inventors, but inexperienced businesspeople,” says Richard. “As the company grows, our experts can help them with areas including debt collection; funding applications; recruitment; and employment, including contract templates and handling grievances."
For example, Markel Tax can help with funding and patent applications, as well as ensuring policyholders get all the additional incentives and reliefs they are entitled to, such as research and development credit. “Few insurers can offer that, and brokers should invest time into understanding the very specific needs of clients in these fast-growing sectors and how specialists like Markel can serve them,” says Richard. “If you invest that time, you will achieve a competitive advantage over those that don’t.”
*Based on Markel research on 100+ brokers and respective clients conducted in 2020-2021