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UK SME Insurance - Market Dynamics and Opportunities 2023

Best Price Guarantee Length Publisher Published Date SKU
from $3,450 47 Pages GlobalData December, 2023 GBDT18475238
Best Price Guarantee
Price from $3,450
Length 47 Pages
Publisher GlobalData
Published Date December, 2023
SKU GBDT18475238

UK SME Insurance - Market Dynamics and Opportunities 2023


Summary

The UK SME insurance space generated approximately GBP13.96 billion in gross written premiums (GWP) in 2022, growing by 7.2%. Moreover, the market is set to grow by 11.2% in 2023e, reaching a value of GBP15.52 billion. The primary factor contributing to GWP growth in 2023 was a large year-round hardening of premiums. Many insurance lines experienced significant increases in the cost of repayments due to inflation and issues with the global supply chain, which led insurers to raise premiums. Meanwhile, penetration rates increased across some product lines compared to the prior year, allowing insurers to grow the volume of policies sold. Accompanying this, there was an increase in the number of SMEs in the UK.

This report looks at the state of the UK SME insurance market. It sizes the market in 2023 and forecasts future GWP until 2027. It utilizes GlobalData’s annual UK SME Insurance Survey to analyze SMEs’ attitudes to insurance. The report also explores the key factors impacting the market in 2023 and beyond.

Scope
  • The number of SMEs in the UK increased by 0.8% in 2023, rising from 5,501,260 to 5,547,170.
  • The cost-of-living crisis is SMEs’ biggest concern, with 81.8% of SMEs concerned to some degree.
  • The SME insurance market is set to be worth GBP15.52 billion in 2023e, up 11.2% on 2022.
  • GlobalData forecasts the SME insurance market to reach GBP17.32 billion in 2027, recording a compound annual growth rate (CAGR) of 4.4% over 2022-27.
Reasons to Buy
  • Learn about the significance of SMEs within the commercial insurance market and how they are influenced by the UK economy.
  • Identify the effects of the cost-of-living crisis on the UK SME insurance space, as well as other challenges faced by SMEs.
  • Discover GlobalData’s forecasts for the SME insurance market.
  • Identify growth opportunities in the SME space.


  • Executive Summary
    • Claims inflation has led to strong premium growth
    • Key findings
    • Critical success factors
  • The Shape of the UK SME Market
    • Introduction
    • SMEs account for the vast majority of UK businesses
      • Table The number of SMEs in the UK private sector by business size, 2014-23
      • Table UK private enterprise volume, employment, employees, and turnover by business size as of the start of 2023
      • Table Figure 1: The vast majority of UK private enterprises are micro-sized firms, but they only account for around one fifth of turnover
      • Table The number of company registrations in the UK (000s), 2016-23
      • Table Figure 2: In Q2 2023, quarterly company insolvencies reached over 6,300 for the first time since 2009
      • Table Figure 3: Wholesalers and retailers account for a third of all SME turnover in 2023
    • Macroeconomic impact on the SME market
      • Table Figure 4: The cost-of-living crisis remains a concern for the majority of SMEs
    • UK GDP has fluctuated since the COVID-19 pandemic
      • Table Figure 5: The UK's GDP increased by 1.4% in Q3 2023
      • Table Figure 6: The number of people receiving Universal Credit is rising, albeit at a slow pace
      • Table Figure 7: The UK's unemployment rate began to rise in 2023
      • Table Figure 8: The annual growth rate for weekly earnings returned to positive territory in 2023
    • SMEs' top concern in 2023 is the cost-of-living crisis
      • Table Figure 9: The cost-of-living crisis remains the top concern for SMEs
      • Table Figure 10: Over 80% of businesses in the health and social sector are concerned about the cost-of-living crisis
      • Table Figure 11: Over three quarters of non-profit SMEs are concerned about generating enough revenue to keep their business going
  • The UK SME Insurance Market
    • The SME insurance market registered growth of 7.2% in 2022, and is set to have grown further in 2023e
      • Table Figure 12: The SME insurance market experienced growth in 2022, and is expected to increase further in 2023
      • Table Figure 13: Renewals saw increased premiums for cyber, property, and business interruption insurance in 2023
      • Table Figure 14: Insurance rates increased year on year in Q1 2023, with property the key driver
    • SMEs are increasingly purchasing insurance via packages
      • Table Figure 15: Over 80% of medium-sized enterprises purchase insurance via a package
    • Private medical insurance has witnessed the highest cancellation rate due to the cost-of-living crisis
      • Table Figure 16: The largest proportion of cancellations due to the cost-of-living crisis were seen in private medical insurance
      • Table Policy cancellations due to the cost-of-living crisis by products and SME size, 2023
    • Insurers should educate SMEs on the importance of employers' liability insurance
      • Table Figure 17: Some SMEs are not aware employers' liability insurance is a legal requirement
    • Usage-based policies can benefit SMEs
      • Table Figure 18: Over half of SMEs do not have a usage-based insurance policy
      • Table Figure 19: Among SMEs without usage-based commercial vehicle insurance, around three quarters would be interested in such policies if they reduced their premiums
      • Table Figure 20: SMEs rank improved safety measures as the most important feature of usage-based car insurance
    • Penetration rates vary across different lines of products
      • Table Figure 21: Insurers have experienced varying degrees of success in terms of product penetration
      • Table Product uptake among UK SMEs, 2019-23
    • Larger SMEs are more likely to have most types of insurance
      • Table Figure 22: There is a positive correlation between size of business and insurance penetration rates
  • The Future of the UK SME Insurance Market
    • SME GWP is set to rise steadily to GBP17.32 billion by 2027
      • Table Figure 23: SME insurance GWP is set to reach GBP17.32 billion in 2027
      • Table Figure 24: Over half of SMEs would consider using an insurance app
      • Table Figure 25: Smaller firms exhibit a lower level of comfort when it comes to AI assessing their insurance requirements
      • Table Figure 26: SMEs believe AI can evaluate their insurance needs and suggest the best coverage options more efficiently than humans
      • Table Figure 27: Sole traders place high value on human expertise and advice
      • Table Figure 28: Larger SMEs are more comfortable with AI-powered chatbots for insurance enquiries
      • Table Figure 29: Larger businesses are more likely to switch to an EV sooner
      • Table Figure 30: Two fifths of medium-sized businesses rank an insurer's sustainability record as very important
  • Appendix
    • Abbreviations, acronyms, and initialisms
    • Definitions
    • Methodology
      • Table Figure 31: Forecasting methodology
    • Secondary sources
    • Further reading
  • About GlobalData
  • Contact Us

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