UK SMEs value sustainability but not when it comes to choosing insurers, says GlobalData

An insurer’s record in sustainability is the least important factor to UK-based small-to-medium enterprises (SMEs) when it comes to choosing insurers, according to a recent survey by GloalData*. The leading data and analytics company asked UK SMEs to rank factors ranging from the cost of a policy to the speed at paying claims in terms of their importance when choosing an insurer. Sustainably came second last, in ninth place. However, responses to another question suggests that this is not necessarily because of a lack of appreciation for sustainability. When asked about the importance of sustainability, 67.6% of SMEs ranked it as either four (important) or five (very important).

Ben Carey-Evans, Insurance Analyst at GlobalData, comments: “While consumers view sustainability as an increasingly important issue, and hope the businesses they work with are proactive about it, it is still not competing with the key reasons for purchasing.”

The factors ranked above sustainability by SMEs, in order from first to eighth, were: cost of policy, reputation of provider, transparency of pricing, pays claims in full and promptly, ability to tailor a policy around specific needs, established and known brand name, previous relationship with insurer, easy to access and understand policy information and in tenth, have surveyors who come to assess my property.

Carey-Evans continues: “Cost of policy was seen as the most important factor, as it was ranked first by 24% of respondents. This is not particularly surprising, but at the same time it may take consumers being willing to pay more to avoid companies with poor records in sustainability to give a sense of urgency to the leading insurers. Similarly, the factors which ranked third and fourth were transparency of pricing (11%) and pays claims promptly (10%. This makes it very clear that SMEs’ main concerns when purchasing an insurance policy is financial, despite saying sustainability is a very important issue to them.

Looking at sustainability specifically, there was a considerable difference in the proportion (7.3 percentage points) of SMEs that said sustainability was in tenth position (least important) compared to ninth position, which was the single biggest gap between any position. This shows that considerably more respondents placed sustainability last than  in any other position.

Carey-Evans continues: “For now, insurers may be able to do the bare minimum in sustainability and retain customers based on price or reputation. 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.”

* GlobalData’s 2021 UK SME Insurance Survey

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