Summary

Brokers are the most popular channel among SMEs when purchasing insurance. However, there are higher levels of competition in this space than among larger corporations. This is due to different-sized SMEs having a varying degree of complexity in their insurance needs, allowing them more versatility when choosing how to purchase insurance. Banks and price comparison websites continue to challenge brokers’ dominance, although the latter’s role is limited to simple and familiar products. Capturing market share within this space is no easy task, as the proportion of policies that are auto-renewed is quite high. In the end, price is the defining reason SMEs switch policy. As a result, insurers that can lower premiums through more accurate underwriting or cutting administrative costs will find success in increasing their market share.

This report looks at how SMEs buy insurance coverage and the reasons behind their purchasing decisions. It examines the channel used by SMEs when purchasing insurance, pre-purchase activities, switching behavior, and whether SMEs are considering canceling any of their existing policies.

Scope

- Brokers remain the most popular purchasing channel for SMEs when purchasing insurance, accounting for just under half of all purchases.
- 52.7% of policies are auto-renewed, making it difficult for providers to capture new business.
- The proportion of SMEs considering canceling their insurance policies or switching their current insurance provider grows in line with SME size.

Reasons to Buy

- Identify the most prominent sales channel for SMEs.
- Adapt/re-evaluate your distribution strategy and proposition to meet the needs of modern consumers.
- Discover the factors influencing SME purchasing decisions and distribution channel selection.