Published : Dec-2018
No. of Pages : 46
1. EXECUTIVE SUMMARY 1
1.1. Market summary 1
1.2. Key findings 1
1.3. Critical success factors 1
2. THE SME PURCHASING JOURNEY 7
2.1. Introduction 7
2.1.1. SMEs make up the backbone of the UK economy 7
2.2. Price comparison sites and banks challenge brokers' dominance 7
2.2.1. Broker popularity increases as the size of the business grows 9
2.2.2. Micro businesses are moving from the direct channel to comparison websites 10
2.2.3. Small businesses moved from the direct channel to price comparison sites and banks in 2018 12
2.2.4. The bancassurance channel is strongest among medium-sized businesses 15
2.2.5. SMEs predominantly auto-renew policies across all business sizes 16
2.2.6. Young companies are embracing the use of technology 18
2.2.7. Face-to-face purchasing increases in popularity in line with the age of the business 19
2.3. SME pre-purchase activity shows a retention-heavy market 20
2.3.1. SMEs' primary action at renewal is to call their existing providers 20
2.3.2. A significant percentage of SMEs conduct research on price comparison sites 21
3. SME RETENTION 24
3.1. Larger businesses are more likely to renew their existing policies 24
3.2. Sole traders compare prices at renewal, but rarely change 25
3.3. Micro enterprises (excluding sole traders) have a high retention rate 27
3.4. Small enterprises are more likely to auto-renew than compare prices 28
3.5. Medium enterprises show a high degree of loyalty to providers 30
4. SERVICES PROVIDED BY INSURERS 34
4.1. A simple policy explanation is essential, but larger SMEs prioritize full pay-outs 34
4.2. The most common added-value service used by SMEs is legal advice 38
4.2.1. Openness to receiving services is dependent on SME size 40
5. APPENDIX 43
5.1. Definitions 43
5.1.1. SME 43
5.2. Methodology 44
5.2.1. GlobalData's 2018 UK SME Insurance Survey 44
5.3. Further reading 44
List of Tables
Table 1: Method of purchasing insurance by SME size category, 2018 18
Table 2: SME pre-purchase activity by category size, 2018 23
Table 3: The actions undertaken by SMEs at the time of renewal, 2018 33
Table 4: Insurance services most valued by SMEs, 2018 38
Table 5: The percentage of SMEs receiving additional services, 2018 40
List of Figures
Figure 1: Banks and PCWs pick up broker and direct business in 2018 8
Figure 2: The dominance of brokers increases with the size of the company 9
Figure 3: Micro insurers have been veering away from brokers in recent years 10
Figure 4: Brokers are losing share in the sole trader market but remain a leading player in the majority of lines 11
Figure 5: Micro businesses (excluding sole traders) prefer the broker channel in 13 out of 16 products 12
Figure 6: Brokers bounce back in the small business category 13
Figure 7: The broker channel remains dominant among small businesses 14
Figure 8: Brokers remain dominant among medium enterprises, but their gradual annual decline continues 15
Figure 9: Medium-sized businesses prefer brokers for every product, but other channels are emerging 16
Figure 10: Auto renewal is the most popular for all size categories 17
Figure 11: Businesses are more likely to switch, and use online methods, in the first couple of years of operation 19
Figure 12: Auto-renewal leads the way for established businesses 20
Figure 13: Contacting existing providers remains the most common action 21
Figure 14: Larger businesses are more likely to renew their insurance policies 25
Figure 15: Comfortably over 50% of sole traders stay loyal to insurers in every product line 26
Figure 16: Vehicle-based lines are most at risk of sole trader customers switching 26
Figure 17: An average of 74% of micro businesses (minus sole traders) renew policies 27
Figure 18: Micro businesses are unlikely to switch public and employers' liability policies 28
Figure 19: On average, 82% of small enterprises renew policies 29
Figure 20: Small businesses are most likely to switch in the more common property and single motor lines 30
Figure 21: An average of 82% of medium businesses also renew, but a higher proportion do it automatically 31
Figure 22: Switching rates are lower among medium businesses, with vehicle-based products still the most likely 32
Figure 23: Micro insurers require ease of understanding and transparency 35
Figure 24: Smaller businesses focus on prompt and full payouts from insurers 36
Figure 25: Medium businesses are more concerned about receiving full payouts than prompt ones 37
Figure 26: Legal advice remains the most used add-on 39
Figure 27: Roughly three quarters of medium-sized businesses value all categories of add-on services 41
Figure 28: Sole traders have less demand for add-on services 42
