0
0
Home > Financial Services >  Insurance >  General Insurance >  United Kingdom (UK) SME Insurance – Market Dynamics and Opportunities 2020

United Kingdom (UK) SME Insurance – Market Dynamics and Opportunities 2020

The UK SME market generated approximately £8.3bn in gross written premiums (GWP) in 2019, growing marginally by 1.0%. With a hardening insurance market we would have expected to see more significant premium growth in 2020. However, due to the COVID-19 pandemic the SME insurance market is expected to contract by 4.7% in 2020, mainly driven by the government-imposed lockdown for the majority of Q2. As the year draws to a close, coronavirus cases are on the rise again, with countrywide lockdowns enforced across the UK threatening the partial recovery seen in Q3.

This report analyzes the UK SME insurance market. Economic factors including GDP growth, SME business confidence, and unemployment rates are explored in relation to the UK business landscape. Growth in the number of SMEs is explored by business size and industry. The SME market is discussed in relation to the uptake of commercial insurance. Finally, an estimate of the current and historic market size is provided, in addition to a five-year forecast.

Scope

– The SME insurance market is expected to contract in 2021 before returning to growth in 2022.

– In 2024, the market is expected to generate £8.9bn in GWP.

– 11.4% of SMEs canceled at least one insurance policy as a result of the coronavirus pandemic.

Reasons to Buy

– Be aware of the significance of SMEs within the commercial insurance market and how they are influenced by the UK economy.

– Adapt your strategy and ensure you remain competitive by understanding the opportunities for growth within the SME insurance market.

– Recognize the challenges the SME insurance market faces.

– See GlobalData’s forecasts for the SME market.

Companies Mentioned

TUI

Marston’s

Pret a Manger

Gap

Table of Contents

Table of Contents

1. Executive Summary

1.1 COVID-19 has reversed years of growth

1.2 Key findings

1.3 Critical success factors

2. The Shape of the UK SME Space

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 is set to drop substantially in 2020

2.5 Fallout from COVID-19 remains businesses’ key concern

3. The UK SME Insurance Market

3.1 The commercial insurance market grew marginally in 2019

3.2 COVID-19 has caused SMEs to cancel policies

3.3 Penetration rates have fallen across a number of insurance lines

3.4 Larger SMEs are more likely to hold every type of insurance

4. The Future of the UK SME Insurance Market

4.1 SME GWP is expected to fall by

4.7% in 2020

5. Appendix

5.1 Abbreviations and acronyms

5.2 Definitions

5.3 Methodology

5.4 Secondary sources

5.5 Further reading

List of Tables

List of Tables

Table 1: The number of SMEs in the UK private sector by business size, 2011-20

Table 2: UK private enterprise volume, employment, employees, and turnover by business size, start of 2020

Table 3: The number of company registrations in the UK (000s), 2014-20

Table 4: Product uptake among UK SMEs, 2017-20

Table 5: The proportion of SMEs thinking about cancelling a given product

List of Figures

List of Figures

Figure 1: UK SMEs account for the majority of private businesses but around half of total turnover

Figure 2: Company liquidations decreased in the first half of 2020 due to reduced court capacity

Figure 3: More than half of SME turnover is generated by three industries (out of 16)

Figure 4: More than half of all SMEs operated at 50% capacity or less during the initial lockdown

Figure 5: Business closures were most prevalent among hotels and restaurants

Figure 6: Consumer sentiment is on a downward trend moving into Q4

Figure 7: UK GDP fell sharply in Q2 2020

Figure 8: The number of people on Universal Credit substantially increased in April 2020

Figure 9: The UK unemployment rate has been steadily rising since the onset of coronavirus

Figure 10: Individuals have seen their purchasing power falter since Q1 2020

Figure 11: Businesses are concerned about COVID-19 impacts

Figure 12: A fifth of SMEs in the hotel and restaurant industry are extremely concerned about revenue

Figure 13: The SME insurance market saw minimal growth in 2019

Figure 14: Most commercial insurance rates have been steadily increasing

Figure 15: There has been a fall in insurance uptake due to COVID-19

Figure 16: A number of lines of business have seen drops in penetration rate

Figure 17: Penetration rates increase as businesses get larger

Figure 18: SME GWP is expected to rebound in 2022 after two years of negative growth

Figure 19: SMEs have seen a substantial increase in employees working remotely

Figure 20: The majority of SMEs think remote working levels will remain higher than before coronavirus

Figure 21: SMEs are aware that they face increased cyber risk because of COVID-19

Figure 22: SMEs are more likely to purchase cyber insurance because of COVID-19

Figure 23: Medium businesses are most likely to pay for pandemic insurance

Figure 24: Larger businesses are willing to pay more for pandemic insurance

Figure 25: Forecasting methodology

    Pricing

Discounts available for multiple purchases.

reportstore@globaldata.com
+44 20 7947 2960

Join our mailing list

Saved reports