UK SME Insurance - Market Dynamics and Opportunities 2023

PUBLISHED: December 28, 2023

PAGES: 47 Pages

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The UK SME insurance space generated approximately GBP13.96 billion in gross written premiums (GWP) in 2022, growing by 7.2%. Moreover, the market is set to grow by 11.2% in 2023e, reaching a value of GBP15.52 billion. The primary factor contributing to GWP growth in 2023 was a large year-round hardening of premiums. Many insurance lines experienced significant increases in the cost of repayments due to inflation and issues with the global supply chain, which led insurers to raise premiums. Meanwhile, penetration rates increased across some product lines compared to the prior year, allowing insurers to grow the volume of policies sold. Accompanying this, there was an increase in the number of SMEs in the UK.

This report looks at the state of the UK SME insurance market. It sizes the market in 2023 and forecasts future GWP until 2027. It utilizes GlobalData's annual UK SME Insurance Survey to analyze SMEs' attitudes to insurance. The report also explores the key factors impacting the market in 2023 and beyond.

Scope

The number of SMEs in the UK increased by 0.8% in 2023, rising from 5,501,260 to 5,547,170.
The cost-of-living crisis is SMEs' biggest concern, with 81.8% of SMEs concerned to some degree.
The SME insurance market is set to be worth GBP15.52 billion in 2023e, up 11.2% on 2022.
GlobalData forecasts the SME insurance market to reach GBP17.32 billion in 2027, recording a compound annual growth rate (CAGR) of 4.4% over 2022-27.

Reasons to Buy

Learn about the significance of SMEs within the commercial insurance market and how they are influenced by the UK economy.
Identify the effects of the cost-of-living crisis on the UK SME insurance space, as well as other challenges faced by SMEs.
Discover GlobalData's forecasts for the SME insurance market.
Identify growth opportunities in the SME space.

1. Executive Summary

1.1 Claims inflation has led to strong premium growth
1.2 Key findings
1.3 Critical success factors

2. The Shape of the UK SME Market

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 has fluctuated since the COVID-19 pandemic
2.5 SMEs' top concern in 2023 is the cost-of-living crisis

3. The UK SME Insurance Market

3.1 The SME insurance market registered growth of 7.2% in 2022, and is set to have grown further in 2023e
3.2 SMEs are increasingly purchasing insurance via packages
3.3 Private medical insurance has witnessed the highest cancellation rate due to the cost-of-living crisis
3.4 Insurers should educate SMEs on the importance of employers' liability insurance
3.5 Usage-based policies can benefit SMEs
3.6 Penetration rates vary across different lines of products
3.7 Larger SMEs are more likely to have most types of insurance

4. The Future of the UK SME Insurance Market

4.1 SME GWP is set to rise steadily to GBP17.32 billion by 2027

5. Appendix

5.1 Abbreviations, acronyms, and initialisms
5.2 Definitions
5.3 Methodology
5.4 Secondary sources
5.5 Further reading
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List of Tables

Table 1: The number of SMEs in the UK private sector by business size, 2014-23
Table 2: UK private enterprise volume, employment, employees, and turnover by business size as of the start of 2023
Table 3: The number of company registrations

List of Figures

Figure 1: The vast majority of UK private enterprises are micro-sized firms, but they only account for around one fifth of turnover
Figure 2: In Q2 2023, quarterly company insolvencies reached over 6,300 for the first time since 2009
Figur