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.
– 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.
Pret a Manger
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
2.2 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
5.1 Abbreviations and acronyms
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