United Kingdom (UK) SME Insurance - Purchasing Journey 2021

United Kingdom (UK) SME Insurance - Purchasing Journey 2021


This report looks at how SMEs buy insurance coverage and the reasons behind their purchasing decisions. It examines the channels used by SMEs when purchasing insurance, pre-purchase activities, switching behavior, and whether SMEs are considering canceling any of their existing policies. The report uses results from our annual UK SME Insurance Survey, as well as additional in-depth interviews with industry leaders.

SMEs play a major role in the UK economy, accounting for 99.9% of all private businesses. SMEs have lower insurance uptake rates compared to mid-market and corporate businesses as their risks are less complex. Overall, brokers are the most popular channel for SMEs, but direct sales are increasing - particularly in the sole trader segment. Selling the first policy is critical, as the majority of SMEs renew their policies with existing providers. However, COVID-19 has encouraged switching and shopping around, making it more important than ever for insurers to invest in their customer relationships.


  • Brokers remain the most popular channel for SMEs when purchasing insurance, accounting for 45.7% of policies sold.
  • 48.7% of policies are bought online, demonstrating the importance of strong digital offerings.
  • The largest proportion of SMEs renew their insurance policies at expiration with their current provider, with 48.9% auto-renewing.
  • Price is the main factor when SMEs decide to switch providers. This is especially true for sole traders and micro enterprises.
Reasons to Buy
  • Identify the most prominent sales channels for SMEs.
  • Adapt or re-evaluate your distribution strategy and proposition to meet the needs of modern customers.
  • Discover the factors influencing SME purchasing decisions and distribution channel selection.
  • Understand switching behaviors among different client segments and insurance products.
  • Evaluate the impact of COVID-19 on buying behaviors of SMEs.
  • Learn how important insurers’ record on sustainability is for their corporate customers.

  • Executive summary
  • Critical success factors
  • The UK SME Landscape
    • SMEs play a major role in the UK economy, accounting for 99.9% of all private businesses
  • Purchasing Channels
    • Overview
    • Brokers remain the most popular channel among SMEs
    • Brokers are the most popular purchasing channel across all SMEs
    • Broker sales dipped noticeably among sole traders in 2021, with a shift to direct sales
    • Channel popularity varies depending on insurance product
    • In 2021, direct sales to micro enterprises increased at the expense of banks and PCWs
    • More than half of policies are sold through brokers for a number of products
    • The bank channel has declined in popularity among small enterprises, while PCWs have prospered
    • Banks are consistently popular across all products for small enterprises
    • Brokers dominate among medium enterprises but dipped in popularity in 2021
    • The use of PCWs is much less common across all products for medium enterprises
    • Most SMEs purchase their insurance online
    • Online purchases are most popular with newly incorporated businesses
  • Provider Selection and Customer Retention
    • Overview
    • Small businesses are most likely to automatically renew insurance policies
    • Over a quarter of sole traders switched their company car insurance
    • Switching rates are high across a number of products for micro enterprises
    • Small businesses have higher automatic renewal rates than other segments
    • A higher proportion of medium enterprises that shop around end up switching
    • With the exception of small businesses, price is the main reason for switching provider
    • Price remains the most important factor when selecting a provider
    • The importance of an insurer's record on sustainability increases in line with the size of the business
    • Larger SMEs undertake more research before purchasing insurance
  • Future Switching and Cancellations
    • Overview
    • Sole traders are largely content with their current providers
    • Micro businesses are actively considering changes to their policies
    • Small businesses are increasingly thinking about switching provider
    • Medium-sized businesses are most likely to switch provider in the future
    • COVID-19 was the main factor for SMEs considering switching providers or canceling policies
  • Appendix

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