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AXA’s dominance of SME insurance under threat

AXA remains the leading insurer in the UK SME market, but Aviva and other competitors are closing in according to our 2017 UK SME Insurance Survey.

AXA is the market leader in 10 out of 16 SME insurance lines, as per the SME respondents to our survey. The insurer appears in the top five for all 16 products covered.

AXA has managed to create successful online and direct distribution channels while maintaining commitment to brokers, which has led to its consistently strong position across all SME lines. Mid-2017 financial results indicate AXA achieved double-digit growth in the online SME market.

However, its leading shares have decreased in the face of pressure from competition. In the 10 lines it places first its margin over the second-largest insurer (which is Aviva in nine cases and Hiscox in one) has fallen to an average of just 1.7 percentage points, down from 4.2 percentage points in 2016.

Aviva is top of the pile almost everywhere AXA is not, due to its wide broker network, well-developed Fast Trade e-trading platform, and its (albeit limited) expansion into the direct-to-SME channel. Hiscox, with an established direct-to-SME offering and some of the highest Net Promoter Scores among the big SME players, continues to perform well in our surveys, placing particularly highly in liability lines.

AXA’s overall share of respondents fell from 21.4% in 2016 to 13.9% in 2017. While Aviva’s share fell from 14.9% to 11.3%, the margin between the two has reduced in the vast majority of the nine lines that AXA and Aviva place first and second respectively.

AXA has responded to its steadily declining control over the SME market by reshaping its proposition in its weakest area, commercial motor, where it is the market leader in just one of the six product lines. It will be interesting to see if its increased offering (which includes mis-fueling, no claims bonus protection, and potential hotel expenses) can help AXA’s footprint expand further in the SME insurance market.

By Ben Carey-Evans, General Insurance Analyst

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