United Kingdom (UK) SME Insurance Market Size, Trends, Competitor Dynamics and Opportunities

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UK SME Insurance Competitive Analysis Report Overview

Despite the significant economic challenges faced by small and medium-sized enterprises (SMEs) in recent years, the number of SMEs still increased in the UK in 2023. This growth highlights the importance of these companies as a source of business growth in the commercial insurance sector. Since SME switching behavior has increased, insurers should offer cheaper or more affordable policies.

The UK SME insurance market research report presents information on the leading insurers in the SME segment and examines their methodologies for developing propositions. The report also highlights how competitor positions vary among micro, small, and medium enterprises. Furthermore, it reveals which insurers are winning over brokers and with which companies SMEs are placing their businesses.

Key Channels ·        Brokers

·        Direct Channels

·        Banks

·        PCW

Leading Providers ·        Aviva

·        AXA

·        Zurich

·        Direct Line

·        NFU Mutual

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UK SME Insurance Market Critical Success Factors

  • Offering affordability and support to SMEs amid economic challenges: Insurers can support SMEs by customizing policies to meet a range of needs during the UK’s cost-of-living crisis and stagnant economy. However, providing more cost-effective policies became critical as a result of increased switching behavior in 2023.
  • Provision of value-added services such as advice on business strategy and marketing support: Offering value-added services such as marketing support and business strategy advice is a growing opportunity for sole traders and micro businesses. In addition, there is an opportunity to provide marketing support to SMEs.

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UK SME Insurance Market Segmentation by Channels

Brokers is the most important distribution channel in the SME insurance market

The key channels in the UK SME insurance market are brokers, direct channels, banks, and PCW. Most of the SME insurance policies were sold through brokers in 2023. Insurance brokers are essential to the distribution of commercial insurance. The presence of brokers has a significant impact on the competitive dynamics within the market. Aviva continues to hold a leading position in the packaged and non-packaged insurance markets in the brokers sub-segment.

UK SME Insurance Market Analysis by Channels, 2023 (%)

UK SME Insurance Market Analysis by Channels, 2023 (%)

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UK SME Insurance Market – Competitive Landscape

Aviva sold the highest number of contracts in 2023

A few of the leading providers in the UK SME insurance market are Aviva, AXA, Zurich, Direct Line, and NFU Mutual. Aviva’s strong performance, particularly in the domain of commercial brokers, influenced competitive conditions within SME insurance. Meanwhile, Barclays and Lloyds Bank dominated the bancassurance market in 2023. Aviva, AXA, and Zurich will continue to dominate the market in 2024 due to their substantial product offerings, strong relationships with commercial brokers, and strong market presence.

UK SME Insurance Market Analysis by Providers, 2023 (%)

UK SME Insurance Market Analysis by Providers, 2023 (%)

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UK SME Insurance Market - Latest Developments

  • A new cyber insurance product designed specifically for micro businesses was launched by Aviva in October 2023. The product is designed to improve access for smaller businesses. It includes several benefits such as credit monitoring, reputation management, and identity fraud monitoring services.
  • Zurich UK invested in AI and natural language processing technologies in June 2023 to strengthen its efforts in the fight against claims fraud. The insurer has automated its research and intelligence-gathering procedures in partnership with Xapien, allowing for the quick validation of background data in a matter of minutes.

Segments Covered in the Report

UK SME Insurance Channels Outlook

  • Brokers
  • Direct Channels
  • Banks
  • PCW

Scope

  • Identify the leading players in the UK SME insurance market.
  • Learn about the providers of choice for SME insurance among brokers.
  • Discover the strategies and Net Promoter Scores of the top SME insurers.
  • Identify growth opportunities in the SME space.
  • Find out which value-added services are in demand.

Reasons to Buy

• Identify the leading players in the UK SME insurance market .

• Learn the providers of choice for SME insurance among brokers.

• Discover the strategies and Net Promoter Scores of the top SME insurers.

• Identify growth opportunities in the SME space.

• Find out which value-added services are in demand.

Aviva
AXA
Direct Line
Lloyds Bank
Barclays
Zurich
LV=
NFU Mutual
Bupa
Simply Business
NIG
RSA
Bank of Scotland
RBS
HSBC
Santander
NatWest
Xapien
Hiscox

Table of Contents

  • 1. Executive Summary
  • 1.1 Market overview
  • 1.2 Key findings
  • 1.3 Critical success factors
  • 2. The UK SME Insurance Landscape
  • 2.1 SME numbers rose in 2023 despite a tough economic climate
  • 2.2 SME insurance penetration rose in eight of 16 products
  • 2.3 Packaged insurance policies become increasingly popular as the size of the SME increases
  • 3. The Leading Providers in SME Insurance
  • 3.1 Aviva displaced AXA to become the top provider in 2023
  • 3.2 Leading providers for brokers: Aviva leads broker selection
  • 3.3 Leading bancassurance providers: Lloyds Bank narrowly takes lead over Barclays
  • 4. The Top Three SME Insurers: AXA, Aviva, and Zurich
  • 4.1 NPS results differ across the top three providers, with AXA faring worst
  • 4.2 Aviva is targeting micro businesses with cyber insurance
  • 4.3 AXA plans to expand its cyber offering to small and medium businesses
  • 4.4 Zurich is seeking growth from the SME segment
  • 5. Value-Added Services: Uptake and Demand
  • 5.1 Legal advice is the most accessed service, but the greatest opportunities lie elsewhere
  • 5.2 Businesses grow and their needs become more complex, which increases the need for value-added services
  • 5.3 Demand for value-added services varies across industries
  • 6. Appendix
  • 6.1 Supplementary data
  • 6.2 Abbreviations, acronyms, and initialisms
  • 6.3 Definitions
  • 6.4 Methodology
  • 6.5 Secondary sources
  • 6.6 Further reading
  • 7. About GlobalData
  • 8. Contact Us

Table

Table 1: The number of SMEs in the UK private sector by business size, 2013-23

Table 2: Top three overall players’ market shares by product line, 2023

Table 3: The breakdown of NPS results for the top three providers for key products, 2023

Table 4: SMEs’ 2023 outlook on value-added services by business size

Figures

Figure 1: SME insurance uptake increased for eight out of 16 products in 2023

Figure 2: Over 70% of small and medium businesses bought insurance via a package in 2023

Figure 3: The proportion of policies bought via a package has fallen for 13 out of 16 products

Figure 4: Aviva displaced AXA to become the leading SME insurance provider in 2023

Figure 5: Visually comparing the top five providers for each product shows the dominance of AXA and Aviva

Figure 6: Brokers remain the most important distribution channel in the SME insurance market

Figure 7: A quarter of brokers place non-packaged SME insurance business with Aviva

Figure 8: 23.3% of brokers place business for packaged SME insurance with Aviva

Figure 9: Lloyds Bank has overtaken Barclays to become the leading bank for SME insurance

Figure 10: The top three providers show a mixed performance by product in terms of their NPS results

Figure 11: Legal and financial advice are the most used value-added services

Figure 12: The uptake of legal and financial advice increases in line with the size of the business

Figure 13: Demand for marketing support and business strategy advice varies by industry

Figure 14: Top five players’ shares of respondents for 16 different commercial products (sole traders)

Figure 15: Top five players’ shares of respondents for 16 different commercial products (micro-size businesses)

Figure 16: Top five players’ shares of respondents for 16 different commercial products (small-sized businesses)

Figure 17: Top five players’ shares of respondents for 16 different commercial products (medium-sized businesses)

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