Carousel_Arrow Chat icon_cookie IHT_trust_wills IR35 Combined Shape 2 Group 10 Login Mobile Menu Share Share Email SubMenuMobile Group 9 VAT View_Gallery View_List capital_allow Triangle 2 Copy Close construction cyberpro employment_tax_shares emplyer_solutions entrepreneurs_corps fee_protect Group 7 grant_fund Group i_Clock i_Consult i_Done i_Eligibility_Tick i_Enter i_Filter i_HMRC i_Negative i_Play i_Plus i_Reset i_Support_Legal i_Support_TaxDesk i_Support_VAT i_Tick noun_marketing_1872083 noun_online_2126759 i_download i_meet Group Copy 24 Group 18 noun_electrical_1240755 copy noun_Technology_2125422 noun_Science_2031115 i_tick_bullet_block international_tax patent_box private_client property_sdlt r_and_d reliefs_incentives Search specialist_tax status tax_indemnity valuation YouTube
Markel Insurances

06 Apr 2021

COVID-19 recovery: Brokers who provide a specialist tech solution for clients have the edge

As the rollout of the COVID-19 vaccine brings hope to millions, the drive for growth for Tech SMEs, will require a flexible, scalable and specialist approach.

COVID-19 has starkly illustrated that every business needs risk certainty, financial efficiency and legal compliance. The pandemic has also proved the value of access to appropriate insurance, tax, legal and specialist consultancy services to support the stable business environment firms need to prosper.

The implementation of the first national lockdown left firms facing the rapid adoption of completely new ways of working and one in which the demands of their clients and customers also underwent fundamental change.

For tech firms, the drive to a digitalised economy has turned their initial fears for the future into a challenge of how to ensure they can meet future demand.

In March 2020, research by Tech Nation highlighted the fears of tech companies of all sizes as they sought to assess the impact that the national lockdown would have on their business.

Unsurprisingly, the biggest fears were the inability to drive sales and the difficulty of attracting new business.

Firms had been forced to consider furlough schemes and access Government subsidies or support. This brought with it the need for professional business advice that had previously not been considered as a priority for many firms.

The situation provided the opportunity for Markel UK’s specialist product for the technology sector, MarkelTech, to prove its worth. As our broker partners and their clients sought to navigate a path through the challenges of 2020, we were able to offer a broad range of support over and above MarkelTech’s role as a specialist insurance package.

Data from Markel’s legal advice line and online Law Hub facility showed a dramatic shift in both the volume and nature of demand for high-quality, business-related information and advice. Law Hub downloads and page views both increased by well over 50% from Q1 to Q2 2020, and the nature of enquiries shifted dramatically as employers looked to clarify crucial questions for their business.

Such has been the impact of the pandemic on every aspect of our lives, just as the terms “pre-war” and “post-war” are commonly used to describe the 20th century, generations to come will likely discuss the pre-COVID-19 and post-COVID-19 eras.

The New Year has bought with it hope that society and business will begin the road to recovery. While the recovery remains dependent on the success of the efforts to combat COVID-19,  UK tech companies are likely to lead the charge.

The move towards the greater use of technology in many aspects of our lives has rapidly accelerated. In the past, it has taken a decade or longer for game-changing technologies to evolve from ‘cool new things’ to productivity drivers.

The COVID-19 crisis has sped up that transition in areas such as AI and digitisation by several years. A McKinsey article published in January 2021 found that companies are three times more likely than they were before the crisis to conduct at least 80 percent of their customer interactions digitally.

The report predicts that the year ahead will see a “wave of innovation and launch a generation of entrepreneurs”.

“During the COVID-19 crisis, one area that has seen tremendous growth is digitization, meaning everything from online customer service to remote working to supply-chain reinvention to the use of artificial intelligence (AI) and machine learning to improve operations,” the report explained. “Healthcare, too, has changed substantially, with telehealth and biopharma coming into their own.

“Disruption creates space for entrepreneurs—and that’s what is happening in the United States, in particular, but also in other major economies.”

“The near-term challenge, then, is to move from reacting to the crisis to building and institutionalising what has been done well so far,” the McKinsey report stated. “For consumer industries, and particularly for retail, that could mean improving digital and omnichannel business models. For healthcare, it’s about establishing virtual options as a norm. For insurance, it’s about personalising the customer experience.”

According to data compiled for Tech Nation and the Government’s Digital Economy Council, in January 2021, 10% of all current UK job vacancies were for tech jobs. This beat the benchmark from the Office of National Security statistics that 9% of the UK workforce are already employed in the digital tech sector. Not only does this represent the increasing importance of tech to the economic health of the country, but it also highlights the extent to which the digital tech sector is providing jobs at a critical time for the UK population.

Brokers need to be cognisant of the fact that tech businesses are exposed to a number of risks that are different to those faced by the average commercial business. These risks also differ depending on whether the proposer is providing a software service solution or delivering a product.

For tech firms, the year ahead will present opportunities but they will require a dynamic risk solution that can adapt to their specific risk and compliance needs through the whole lifecycle of a technology-enabled businesses.

With our in-depth knowledge of the sector, we have created MarkelTech: a bespoke proposition for companies that innovate, design, develop, manufacture, supply or support technology products, or services.

Where MarkelTech is different is its scalability. The product includes a suite of complementary services to support technology SMEs at each stage of their growth journey.

According to research from Dealroom, tech companies in the UK secured over $15 billion in funding last year, more than the French and German tech markets combined. That investment will have been predicated on the need for growth.

Markel UK’s detailed analysis of the sector has revealed that the majority of tech businesses do not have the appropriate level of cover in place based on their unique requirements. A representative sample of technology risks received between July and September 2019 concluded that 69% of businesses did not have the appropriate level of cover or extensions. Therefore, we believe the sector represents a huge opportunity for brokers that are able to provide a specialist tech solution to their current and prospective clients.

To help brokers and customers understand the challenges and issues that growth can create, we have developed our Tech eBook that provides an overview of risks and opportunities faced by tech businesses, when issues are most likely to happen and the solutions that we can provide.

As tech firms undergo rapid growth driven by investor and client demand, their insurance cover needs to adapt to mirror their changing needs.

By developing an advisory approach, and adding legal and tax services to insurance offerings, brokers can become strategic business partners to their SME clients, and add greater value in the relationship.

Markel UK’s commitment to delivering the best outcomes for clients is unashamedly relentless, meaning we constantly push the boundaries of traditional insurance. We’re here to help technology companies navigate their commercial challenges, enabling them to focus on growing their business.

To discover more about our MarkelTech proposition download our eBook.

Next article in series

06 Apr 2021

Why tech companies need specialist tech insurance covering cyber risks