SME brokerage hasn't changed in 30 years

A few months ago, we asked a dozen SME owners how their relationship with their broker was going. The answers all sounded the same: one meeting per year at renewal, documents signed without really understanding them, a contact that keeps changing. No one was frankly unhappy, no one was really satisfied — and it's probably in that in-between that the real problem lives.

The market everyone missed

When people talk about digitizing insurance, attention naturally goes to two extremes: neo-insurers covering e-bikes and phones in a few clicks, or CAC 40 enterprises with in-house risk management teams and structured RFPs. In between, SMEs in the €5M–€100M revenue range never really got attention.

It's not for lack of interest. It's because no credible solution exists to serve them properly. This segment combines two constraints that cancel each other out: it's too big to be handled at scale like retail, and too small to justify the industrial machinery of large accounts. So it falls into a structural blind spot, mostly served by local or regional brokers using the same tools as thirty years ago. France has more than 11,000 active brokers, 90% of whom employ fewer than 11 people. That local footprint is a strength in proximity, but not a guarantee of expertise or technological means.

Why automation never happened

One question comes up often: why haven't insurtechs solved this? France now has more than 220 insurtech startups, and nearly half operate as online brokers. Yet their target is almost always retail customers or very small businesses with standardized needs. The SME segment stays on the sidelines.

Because SME risks don't look alike. A bakery doing €3M in revenue and a cybersecurity consultancy at the same revenue level have the same boxes to tick on a standard form, but radically different risk exposures. One has stock, premises, employees in a shop. The other has clients trusting it with access to their critical systems.

Automating that means first solving a problem of understanding the business — before it becomes a technology problem. And "understanding the business" is exactly what mass workflows don't do well. So things kept going as before: the generalist broker manages hundreds of files, spends most of their time on compliance and admin, and has little bandwidth left to truly understand what the client does. The insurance program drifts quietly, and no one notices until there is a claim.

The real cost of inaction

What's underestimated is the cost of non-decision. An executive who doesn't understand their coverage isn't just poorly advised: they make growth decisions with a major information bias. They sign contracts without knowing whether their professional liability truly covers the scope of their activity. They invest in a fleet without checking business-use coverage. They open an office abroad without looking at the implications for their policies. Poorly managed insurance doesn't keep you up at night — until the day it stops you from operating.

What it says about the industry

We don't think traditional brokers have failed. Most do a decent job with dated tools and regulatory constraints that weigh down every process. The problem is structural: the economics of traditional brokerage don't incentivize investment in the SME customer experience. Margins are compressed, the volumes required are high, and the relationship is too often reduced to a premium negotiated once a year. Businesses make up three quarters of the clientele at large broker houses, sure — but they are served with tools designed to manage volume, not complexity.

There has been neither demand pressure — with executives enduring rather than truly demanding better — nor supply pressure, for lack of a credible entrant on this specific segment.

Until now.

What we are building at Lesto

We don't start from the assumption that brokers are bad. We start from the assumption that the model is exhausted, and that technology now makes possible what operational constraints used to make impossible: spending time understanding each client's business, systematically, regardless of contract size.

That's our bet. Not selling insurance faster — selling insurance better.