This report looks at how SMEs buy insurance coverage and the reasons behind their purchasing decisions. It examines the channels used by SMEs when purchasing insurance, pre-purchase activities, switching behavior, and whether SMEs are considering canceling any of their existing policies. The report uses results from our annual UK SME Insurance Survey, as well as additional in-depth interviews with industry leaders.
SMEs play a major role in the UK economy, accounting for 99.9% of all private businesses. SMEs have lower insurance uptake rates compared to mid-market and corporate businesses as their risks are less complex. Overall, brokers are the most popular channel for SMEs, but direct sales are increasing - particularly in the sole trader segment. Selling the first policy is critical, as the majority of SMEs renew their policies with existing providers. However, COVID-19 has encouraged switching and shopping around, making it more important than ever for insurers to invest in their customer relationships.
SMEs play a major role in the UK economy, accounting for 99.9% of all private businesses. SMEs have lower insurance uptake rates compared to mid-market and corporate businesses as their risks are less complex. Overall, brokers are the most popular channel for SMEs, but direct sales are increasing - particularly in the sole trader segment. Selling the first policy is critical, as the majority of SMEs renew their policies with existing providers. However, COVID-19 has encouraged switching and shopping around, making it more important than ever for insurers to invest in their customer relationships.
Scope
- Brokers remain the most popular channel for SMEs when purchasing insurance, accounting for 45.7% of policies sold.
- 48.7% of policies are bought online, demonstrating the importance of strong digital offerings.
- The largest proportion of SMEs renew their insurance policies at expiration with their current provider, with 48.9% auto-renewing.
- Price is the main factor when SMEs decide to switch providers. This is especially true for sole traders and micro enterprises.
Reasons to Buy
- Identify the most prominent sales channels for SMEs.
- Adapt or re-evaluate your distribution strategy and proposition to meet the needs of modern customers.
- Discover the factors influencing SME purchasing decisions and distribution channel selection.
- Understand switching behaviors among different client segments and insurance products.
- Evaluate the impact of COVID-19 on buying behaviors of SMEs.
- Learn how important insurers’ record on sustainability is for their corporate customers.
Table of Contents
- Executive Summary
- Critical Success Factors
- The UK SME Landscape
- Purchasing Channels
- Provider Selection and Customer Retention
- Future Switching and Cancellations
- Appendix
