How to ensure SMEs get the right insurance coverage

Paul Lucas [00:00:08] Hello, everyone, and welcome to the latest edition of Insurance Business TV a unique edition in which we are going to zoom in on the evolving liability risks facing small ambitious businesses. Of course, many smaller businesses don’t want to stay that way forever. But as they grow the risks they face become more complex, whether that’s due to hiring more people expanding their customer base, increasing their revenue and law. So how can they prepare themselves? And what role can the insurance industry play? Today, I’m delighted to welcome Mark Paccione, Head of Retail Financial Lines, Lower Middle Markets, North America at AXIS, he’s going to examine how the risk landscape changes in these situations and how the right insurance approach can help. Mark, Welcome to Insurance Business TV. 

Mark Paccione [00:00:56] Thanks, Paul. Great to be here. 

Paul Lucas [00:00:58] So to get us started, Mark, just talk us through the management liability risks. These companies face the insurance buying habits and awareness and the sort of coverages that a small business is likely to need.  

Mark Paccione [00:01:10] Yeah, sure. You started off talking about that. And it was it was a good lead in for some of the some of the risks that are facing small and mid sized companies. Typically, these companies don’t have any public equity or public debt exposure. So we’re really talking about privately held companies. In many cases, they’re in early stages, but as you suggested there, they’re keen to grow their businesses quickly and successfully. And usually what that comes with is exposures and risk characteristics that require them to think about buying management liability products, things like taking on private investors, going to banks for lending services, growing their employee base, creating new sets of products that may require some IP intellectual property exposure, as well as things like creating pension and benefit plans for clients for their excuse me, for their companies. Some of those types of things require early stage companies to start thinking about buying management liability products, typically, they go to their brokers to for that first consultation. 

Paul Lucas [00:02:20] Well, let’s zoom in on the insurance product aspect, then, from an insurer perspective, what are some of the differences, the challenges and the opportunities in covering this sector?  

Mark Paccione [00:02:32] Yeah, it’s an evolving sector. Although it’s been around for a little while, as companies, as early stage companies and clients potentially grow, they start facing different types of challenges. That’s why we created products that are packaged herbal products. So we’re talking about directors and officers liability coverage, employment practices, fiduciary liability, and crime. And typically, you could buy one of these coverages, or all of these coverages, through the same policy, with the help of your broker, really, that helps early stage companies who don’t have very complex risk management within their firms, gives them some certainty that they’re buying coverage that is broad enough to carry them through many of the stages of their development. 

Paul Lucas [00:03:20] We’ve looked at risks and products then. But let’s zoom in a little bit on distribution here as well. What needs to happen to sort of make it work efficiently for the customer and profitably and manageable for that carrier and broker, of course, as well as explain the strategy here. 

Mark Paccione [00:03:36] I think in many instances, the brokers and agents who are selling this product, we have some we have very similar needs in servicing this business. So we’ve created strategies that align with each other. So we’ve got to work in an efficient manner and getting information, data and feedback from clients to our underwriting team so that we can tailor coverages and services like risk management services, claims services, etc, to our clients, via the broker. So in many instances, we’ve got to work efficiently in a in a manner that gets that gets the brokers everything they need, quickly so that they can get to their clients to help them with their buying with their acquisition of the product. 

Paul Lucas [00:04:24] Yeah, well, you mentioned of course, the AXIS name, there a couple of times, just zoom in a little bit more for us, if you don’t mind on what exactly AXIS is doing getting space. 

Mark Paccione [00:04:33] Yeah, AXIS has been in this space for more than 20 years. But recently, we’ve chosen to refocus and reorganize, restructure around this space specifically. So we do think it is a very attractive space for us to really manage the lifecycle of a client from early stage as it gets more complex to a later stage, maybe even publicly traded company. But we do think that there’s a very, very unique opportunity here for access to bring its unique efficiency resources in terms of claims, aggregation of data and information that lets our underwriters tailor coverages and product to the different clients. And understanding really what their ultimate needs are is really key for us to get into that space directly, as I said, a restructuring around that dedicates our whole underwriting team and claims team to this client segment small and mid sized businesses. 

Paul Lucas [00:05:31] And as you’re growing your appetite, of course, any hints or tips or brokers on how you can work together most effectively within the space? 

Mark Paccione [00:05:40] Paul, I think it’s incredibly important for carriers and brokers to work together to really understand the needs of clients. And as they grow and become more complex, they have different needs. And they require different services and tailoring of coverages, etcetera. So communication is key between the brokers and underwriters. However, we really need to understand the client so that’s where we rely upon our broker partners to do that. So absolutely crucial to keep the lines of communication open. 

Paul Lucas [00:06:11] I think you’ve given a lot of our audience watching some great guidance today. So many, many thanks for your time.  

Mark Paccione [00:06:19] Thank you, Paul.  

Paul Lucas [00:06:21] And to all of you watching Of course, that’s what we want to bring up informative educational videos to help you see your clients on the right track, just like Mark has done today. So stay tuned. I will see you next time right here on Insurance Business TV.