29 Oct 2021
Posted in Insurance
UK SMEs recognize an insurers sustainability credentials but value price and reputation more
An insurer’s record on sustainability is important to small and medium sized enterprises (SMEs), but it is the least important factor when it comes to choosing one, according to GlobalData. The leading data and analytics company’s 2021 UK SME Insurance Survey found that, while a high proportion of SMEs rank sustainability as being important to them, other factors such as the cost of a policy, the reputation of the insurer, their relationship with the insurer, transparency of pricing, and paying claims in full and promptly rank well above it..
Ben Carey-Evans, Insurance Analyst at GlobalData, comments: “This indicates that while consumers view sustainability as an increasingly important issue and hope that the businesses they work with are proactive about it, it is still not a deciding factor in the key reasons for purchasing a product. While it is evident that sustainability is not yet comparable to financial concerns for SMEs. The pandemic is likely to have heightened this with the need for cheaper premiums and quick payouts particularly essential.
When respondents were asked to rank sustainability’s importance between one and five (with five being very important), 67.6% of SMEs ranked it either four or five (effectively important or very important). However, when SMEs were also asked to rank a range of other factors that are important to them when choosing an insurer, including sustainability, sustainably came last. There was a considerable difference in the proportion (7.3 percentage points) of SMEs who ranked sustainability 10th compared to ninth, which was the single biggest gap between any position.
Carey-Evans adds: “These findings indicate that insurers may be able to do the bare minimum in sustainability and retain customers based on price or reputation for the time being. However, the fact that it is already an important issue for over two thirds of respondents suggests it will become a more influential factor in insurer selection as time goes by.”