United Kingdom (UK) SME Insurance Market Dynamics, Challenges, Growth Opportunities and Forecast, 2022-2026

Pages: 45 Published: March 08, 2023 Report Code: GDFS0426IA

The UK SME market generated approximately GBP10.5 billion in gross written premiums (GWP) in 2021, growing by 4.5%. The primary factor contributing to GWP growth 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. In particular, property and cyber insurance saw premium prices rise. Penetration rates across most product lines increased compared to 2020, allowing insurers to grow the volume of policies sold. This was despite the number of SMEs declining in 2021.

This report looks at the state of the UK SME insurance market. It sizes the market in 2022 and forecasts future GWP until 2026. It utilizes GlobalData’s annual UK SME Insurance Survey to analyze SMEs’ attitudes to insurance. The report also explores the key factors that will impact the market in 2022 and beyond.


• The number of SMEs in the UK declined by 1.5% in 2022.

• The cost-of-living crisis is SMEs’ biggest concern, with 51.9%% either ‘very concerned’ or ‘extremely concerned.’

• The SME insurance market is estimated to have been worth GBP10.9 billion in 2022, up 4.3% on 2021.

• Business interruption insurance penetration rates showed the biggest growth in 2022, rising by 5.9 percentage points (pp). This is likely due to the impact of the Russia/Ukraine conflict.

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

1. Executive Summary

1.1 Claims inflation has led to steady premium growth

1.2 Key findings

1.3 Critical success factors

2. The Shape of the UK SME Market

2.1 Introduction

2.2 SMEs account for the vast majority of UK businesses

2.3 Macroeconomic impact on the SME market

2.4 UK GDP growth has been sluggish since Q1 2022

2.5 The cost-of-living crisis is a huge concern for SMEs

3. The UK SME Insurance Market

3.1 The SME insurance market registered steady growth in 2021

3.2 Packaged insurance plans are common, especially among small- and medium-sized businesses

3.3 COVID-19 cancellations have fallen as SMEs return towards normalcy

3.4 Employers’ liability take-up increased in 2022, although it remains low given that the product is a legal requirement

3.5 Insurers should offer usage-based policies to help SMEs maintain their cover

3.6 Penetration rates fluctuate across lines, but on the whole key products have increased

3.7 Larger SMEs are more likely to have most types of insurance

4. The Future of the UK SME Insurance Market

4.1 SME GWP is set to rise steadily to GBP12.1 billion by 2026f

5. Appendix

5.1 Abbreviations and acronyms

5.2 Definitions

5.3 Methodology

5.4 Secondary sources

5.5 Further reading

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List of Tables

Table 1: The number of SMEs in the UK private sector by business size, 2011–22

Table 2: UK private enterprise volume, employment, employees, and turnover by business size as of the start of 2022

Table 3: The number of company registrations in the UK (000s), 2016–23

Table 4: Policy cancellations because of COVID-19 by products and SME size, 2022

Table 5: Product uptake among UK SMEs, 2018–22

List of Figures

Figure 1: Most UK private enterprises are SMEs, but they only account for just over half of turnover

Figure 2: Company liquidations rose again in 2022

Figure 3: Three of the 16 industries account for more than half of SME revenue

Figure 4: Over three quarters of SMEs are concerned about the cost-of-living crisis

Figure 5: Only one in five employees anticipate being in the office for more than three days a week

Figure 6: Since the COVID-19 pandemic began, the UK’s GDP has experienced significant fluctuations

Figure 7: In April 2020, the number of people receiving Universal Credit significantly increased

Figure 8: The UK unemployment rate continued to fall in 2022

Figure 9: Since the beginning of the COVID-19 pandemic, total and real earnings have fluctuated

Figure 10: SMEs are concerned about being financially affected by market and economic conditions

Figure 11: Over three quarters of businesses in the IT and business services sector are concerned about generating enough revenue to stay afloat

Figure 12: Over two thirds of the transport, storage, and communication sector are concerned about a situation that would prevent them from trading

Figure 13: The SME insurance market experienced steady growth in 2021

Figure 14: Cyber, property, and business interruption insurance all saw premiums rise at renewal in 2022

Figure 15: Since the COVID-19 pandemic, major commercial insurance lines have experienced fluctuations

Figure 16: In 2022, around 70% of small- and medium-sized businesses purchased packaged insurance

Figure 17: The biggest proportion of cancellations resulting from COVID-19 were seen in commercial motor products in 2022

Figure 18: Some SMEs are not aware employers’ liability is a legal requirement

Figure 19: A fifth of SMEs that do not have usage-based insurance are receptive to the idea

Figure 20: Around three quarters of SMEs would be interested in usage-based car insurance if it reduced their premiums

Figure 21: SMEs view cheaper premiums and improved safety measures as the most important features of usage-based car insurance

Figure 22: Insurers have experienced varying degrees of success with product penetration

Figure 23: Penetration rates rise in line with company size

Figure 24: SME market GWP is set to reach GBP12.1 billion by 2026f

Figure 25: 2022 saw a significant rise in the number of remote workers among SMEs

Figure 26: SMEs are aware that the COVID-19 pandemic increased their cyber risk

Figure 27: SMEs are more likely to buy cyber insurance following the impact of the COVID-19 pandemic

Figure 28: Larger SMEs are more willing to pay for pandemic insurance

Figure 29: Larger SMEs are prepared to spend more on pandemic insurance

Figure 30: Forecasting methodology


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