Small is the new big

Canada has always been a country defined by the small and medium sized enterprises (SMEs) that support the livelihoods of many people from coast to coast to coast. It’s these businesses that will struggle the most to recover from the past seven months and not only get on their feet again but continue to grow and thrive in the communities where they live and serve.

We have an obligation to support these businesses as they employ much of our workforce and in doing so, are the ones that stand up our economy. If they suffer, the rest of the country does and if we want the economy to recover, we need the SME market to recover.

So, how do we do that? Well, the insurance industry can and should help.

One of the keys to unlocking value with SME businesses lies in meeting them where they are, in the middle.

This is a role for forward-thinking underwriters. I think we should help SMEs connect to brokers that understand their risk needs – larger brokers with a broader and possibly a more comprehensive view on risk or smaller broker who have the ability to provide “big” features, but added personal service to their clients. This alignment ensures that their needs, which is to recover and pivot their business models are met.

This two-way exchange of value is what the SME market needs to recover. They need to know that the insurance industry recognizes the value they bring to the economy, and they need to know they can have access to the same level of expertise, coverage and capacity we often reserve for the larger companies.

Approximately 98% of the roughly 1.3M or so companies in Canada have less than 100 employees and are considered small. That’s a large chunk of the total entities looking for help managing their risk. Throw in a pandemic and the past seven months of limitations and the risk profile has changed for SMEs.

Their business models have shifted, they’ve had to explore new channels for service delivery and many of them have embraced eCommerce and other forms of online transactions, which means the potential for them to grow their businesses beyond main street walk ins has also grown.

Small is now big, or at the very least has the potential to be. And if we want to help stimulate recovery and growth, we should treat the SME market like an emerging market rather than merely something to be categorized and bundled. Those businesses have changed, and we need to change how we think about them so we can help them.