United Kingdom (UK) Commercial Insurance Distribution Dynamics by Channels (Broker and Other Commercial Distribution Channels) and Future Market, 2023 Update
Summary
This report discusses the distribution landscape of UK commercial insurance. Each channel is discussed in turn, with a particular focus on the broker channel, which dominates the space. Analysis of responses to GlobalData’s 2023 UK Commercial Insurance Broker Survey offers insight into brokers’ growth and digital transformation strategies going forward. The SME market is discussed, with due consideration given to smaller businesses and their relatively simple insurance needs. The report finishes with an outlook on the future of the distribution landscape, exploring areas for brokers to develop, growth opportunities, and relevant insurtechs.
Brokers continue to dominate the distribution landscape in the UK commercial insurance market with a 79.7% share of the market in 2022. Due to the COVID-19 pandemic, brokers have become increasingly valuable to businesses, highlighting the gaps in cover. The cost-of-living crisis has also increased the risk of underinsurance. Despite not being as dominant among SMEs, over 40% of all types of SMEs purchased insurance through a broker in 2022. However, brokers (especially smaller brokers) must adapt and adopt new technologies into their service offering if they wish to remain competitive.
Scope
- 79.7% of commercial insurance premiums were written through brokers in 2022, an increase of 0.1 percentage points (pp) when compared to 2021.
- The SME space is more competitive, with many micro and small-sized businesses utilizing the direct channel as well as PCWs.
- Marsh remains the leading broker in the UK commercial insurance market.
- Identify the most frequently used channels to purchase commercial insurance.
- Adapt your distribution strategy to cater to the changing needs of clients and intermediaries.
- Learn how market leaders have strategized to achieve their success.
- Understand the trends and themes set to transform the market in the future.
- Executive Summary
- Market overview
- Key findings
- Critical success factors
- Commercial Insurance Distribution Overview
- Brokers continue to dominate the commercial space in 2022
- Table Figure 1: Brokers remain the dominant distribution channel for commercial insurance in 2022
- Table Figure 2: We estimate that brokers accounted for GBP22.0 billion in GWP in commercial lines in 2022
- Table Figure 3: The volume of commercial GWP has generally increased for brokers in 2022
- Table Figure 4: There is more competition within the SME space
- Table Figure 5: The majority of SMEs purchase insurance online
- Brokers continue to dominate the commercial space in 2022
- The Broker Channel
- The broker landscape is dominated by global firms
- Table Figure 6: Marsh's remains market leader as revenues increase to GBP1.47 billion
- Cross-selling and upselling is the most popular growth strategy
- Table Figure 7: Cross-selling and upselling is the most popular growth strategy
- Table Growth strategies utilized by UK brokers, 2023
- Table Figure 8: National brokers are increasingly partnering with insurtechs
- Uptake of additional services remains low in 2023
- Table Figure 9: Super-regional brokers are increasingly adopting additional services, yet uptake remains low
- Table Figure 10: Provincial brokers are least likely to adopt new technologies into their service offering
- Table Figure 11: Super-regional brokers are increasingly adopting new service features in 2023
- Table Figure 12: National brokers are better placed to adopt new services
- An uncertain macroeconomic climate is worrying brokers and SMEs
- Table Figure 13: Brokers are worried about the tough macroeconomic environment
- The broker landscape is dominated by global firms
- Other Commercial Distribution Channels
- The direct channel is responsible for a significant share of business
- The banking channel has a negligible share of distribution in 2022
- Table Selected banks and their insurance provider partners
- The Distribution Landscape Going Forward
- Brokers will continue to be the market leader
- Table Figure 14: We expect brokers to increase their share of distribution over the forecast period
- Commercial insurance distribution going forward
- Table Figure 15: Cyber insurance cancellations remained a key issue in 2022
- Table Figure 16: The majority of sole traders believe their company will not be a target of a cyberattack
- Brokers will continue to be the market leader
- Appendix
- Abbreviations and acronyms
- Definitions
- Methodology
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
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