Why Insurers Need to Keep Earning Their Specialist Status

This article is from Dean Laming, Managing Director of Tradesman Saver.

When Tradesman Saver first launched in 2008, the insurance market looked very different. We were one of the first digital specialist insurance providers dedicated to the construction sector, giving tradespeople a straightforward way to arrange their cover online.

At the time, that was a significant point of difference, but nearly two decades later, using the internet to research, compare, and purchase is an expectation of almost all brands, not an innovation.

The way tradespeople run their businesses has changed too, as have the pressures they face and, as such, what they expect from the companies they deal with.

For niche insurers, that raises an important question about what it actually means to be a specialist today.

Keeping pace with the customer

Over 18 years, our own understanding of the construction sector has become much more detailed, and one thing that has become clear is that describing “the trades” as a single market can take away from significant differences between customers and how they work – and therefore the cover they require.

An electrician, carpenter and plumber might all run small businesses, but their day-to-day work, equipment, customers and risks can look very different.

That thinking has influenced the evolution of Tradesman Saver and, most recently, our rebrand and the launch of Electrician Saver, Cleaner Saver and Carpenter Saver earlier this year. Offering these profession-specific brands allows us to build on the knowledge we’ve developed about providing insurance cover, while creating propositions that more closely reflect the individual markets they serve.

The pressures behind the policy

We strive to take that understanding of nuances as far as we can, so have invested into research to truly understand the realities of working in the trades, to help hone what we offer.

We’ve explored tool theft and its impact on someone’s ability to work, as well as the financial pressures facing tradespeople, from rising fuel and material costs to unpredictable income and the absence of sick pay. We’ve also looked into the mental and physical wellbeing of tradespeople, and how these pressures affect their ability to invest in and plan for the future.

Our latest research, for example, found that almost four in five tradespeople are compromising on at least one business decision because of financial pressures. More than a third are reconsidering which jobs they take on, while others are delaying investment in tools, training, recruitment and marketing.

Not all these issues are insurance risks in the conventional sense. But they tell us a great deal about the resilience of the businesses we’re insuring and the challenges our customers are trying to navigate.

It also creates an opportunity to offer something useful beyond the policy itself. We’ve used our research to produce reports and practical guidance designed to help tradespeople understand and respond to some of these challenges, rather than simply publishing the findings and moving on.

Turning insight into support

The better you understand a market, the easier it becomes to identify where customers may be vulnerable and how your proposition can better support them.

For example, our research has repeatedly highlighted the pressures that self-employment can place on wellbeing. Almost six in ten tradespeople told us that running their business affects their mental health, while almost half said these pressures affect their sleep. As such, we know that the access we provide to mental health counselling as part of our cover is a truly invaluable feature, showing that insurance support doesn’t have to begin and end with a claim.

The same principle applies to financial resilience. While 46% of tradespeople we surveyed said they had cover for loss of earnings, 43% did not. Against a backdrop of concerns about unpredictable income and a lack of sick pay, this highlights the importance of helping customers understand where they may be exposed.

Ultimately, insight should feed into everything from product development and cover to customer experience, communications and wider support. We recently received a Five Star Rating from Defaqto for our Covéa insurance policy, independent acknowledgement of the breadth and quality of the cover we’ve developed. But achievements like these should be milestones rather than an end point. Customer needs will continue to change, and specialist propositions need to change with them.

Specialism never stands still

There are pressures affecting tradespeople today that looked very different five years ago, let alone when Tradesman Saver was first established. The same will be true five or ten years from now.

Technology will change how people work; costs and regulation will continue to evolve; criminals will find new ways to target businesses; skills requirements will shift, and customers’ expectations of their insurer will continue to increase.

For specialist insurance brands, staying relevant means having the mechanisms to identify those changes early and respond to them. There is a temptation to think that specialism is established by identifying a niche, developing a product and building expertise around it, but in reality, that’s simply when the work starts.

After almost two decades serving the construction sector, one of the most important lessons we’ve learned is that you don’t earn the right to call yourself a specialist once. You must keep earning it by understanding your customers as well tomorrow as you do today.