United Kingdom (UK) SME Insurance Market Dynamics, Challenges, Growth Opportunities and Forecast, 2022-2026
United Kingdom (UK) SME Insurance Market Dynamics
The gross written premium (GWP) in the UK SME insurance market was valued at GBP10.5 billion in 2021 and is expected to grow at a CAGR of more than 2% during 2021-2026. The primary factor contributing to GWP growth was a large year-round hardening of premiums. Many insurance lines experienced significant increase in the cost of repayments due to inflation and issues with the global supply chain, which led insurers to raise premiums, particularly property and cyber insurance premium prices. Penetration rates across most product lines increased when compared to 2020, allowing insurers to grow the volume of policies sold. This was despite the number of SMEs declining in 2021.
The UK SME insurance market research report analyzes the significance of SMEs within the commercial insurance market and how they are influenced by the UK economy. The report will help to identify the effects of the cost-of-living crisis on the UK SME insurance space.
UK SME Insurance Market Outlook 2021-2026 (GBP Billion)
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UK SME Insurance Market Dynamics
The rising cost of living is also affecting consumer purchasing power, which has a significant knock-on effect on any consumer-facing SME. The economy bounced back from the COVID-19 pandemic in 2021 as lockdowns ended during H2 and the country returned to a form of normality. This allowed most SMEs to operate fully again. However, many SMEs may have faced staffing issues due to the lasting impacts of COVID-19 and Brexit.
Insurers should focus on communicating and providing support to clients that are struggling with the UK’s challenging business environment. However, insurers face the risk of declining penetration rates as SME numbers continue to fall and businesses cut expenditures due to tight budgets. For this purpose, insurers may need to innovate to counteract a rise in cancellations.
UK SME Insurance Market Segmentation (Based on Size of SMEs)
The key UK SME insurance market is classified into the medium SME, small SME, micro-SME, and sole trader. Medium SMEs led the UK SME insurance market in 2022. In 2022, around 70% of small- and medium-sized businesses purchased packaged insurance.
Packaged insurance plans (whereby several insurance policies are purchased from the same insurer or broker) are a significant component of the product landscape in the SME market. The more complicated an organization’s insurance needs are, the more likely it will require multiple types of insurance coverage.
Percentage Of SMEs That Bought Insurance Via a Package by Size of Business, 2021-2022
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UK SME Insurance Market – Growth Opportunities
Insurers will have to deal with a shrinking SME market in terms of the number of businesses, with rise in liquidation since the onset of the COVID-19 pandemic. Furthermore, the expected recession will undoubtedly cause more businesses to close, which will put pressure on the value of premiums in 2023. The business must reduce expenses to ensure they can survive the recession, given the growing concerns about the ongoing cost-of-living crisis.
The prospective client base for insurers will continue to shrink soon due to the falling number of SMEs in the UK, which will put more pressure on providers to raise prices. However, there is only little growth insurers can achieve by raising premiums further.
UK SME Insurance Market Report Overview
GWP (2021) | GBP10.5 billion |
CAGR (2021-2026) | >2% |
Forecast Period | 2022-2026 |
Key Segments | Medium SME, Small SME, Micro SME, and Sole Trader |
Key Highlights
- 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.
- Discover GlobalData’s forecasts for the market.
- Recognize the challenges faced by UK SMEs.
- Identify growth opportunities in the SME market.
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.
- Discover GlobalData’s forecasts for the market.
- Recognize the challenges faced by UK SMEs.
- Identify growth opportunities in the SME market.
Key Players
Table of Contents
List of Tables
List of Figures
Frequently Asked Questions
The UK SME insurance GWP was valued at GBP10.5 billion in 2021.
The UK SME insurance market is expected to grow at a CAGR of more than 2% during 2021-2026.
The key UK SME insurance market is classified into medium SME, small SME, micro-SME, and sole trader.
Medium SMEs led the UK SME insurance market in 2022.
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