SME insurance market set for digital transformation as more firms buy online

Small firms are increasingly looking to interact with their insurers online, suggesting the market is set to experience a similar digital transformation to the one seen for personal insurance.

 

Monday 4

SME insurance market set for digital transformation as more firms buy online

That is according to new research by PricewaterhouseCoopers (PwC), which reveals more than two-thirds that plan to switch insurance providers in the next two years want to do so over the internet.

 

It also shows that demand is likely to be higher in the UK than in the rest of the world, with 46% of small businesses saying they have already purchased insurance online, compared with 24% worldwide.

 

In addition, over a third of small British firms say they would be willing to use sensor technologies in their businesses if it they thought it would bring down premiums.

 

“Taking a lead from the digital transformation seen in personal lines, UK insurers are now leading the way on how they interact online with small businesses,” PwC UK insurance leader, Jim Bichard, said.

 

“Insurers need to focus on understanding the varied and complicated ways the UK’s small businesses function, as well as investing in ways to deliver a full range of products that will meet their needs.”

 

The research involved surveying 2,100 small and medium-sized businesses (SMEs) with up to 50 employees, finding that 60% under five years old in the UK want to purchase business insurance online.

 

This falls to 44% among more established companies aged over ten years, suggesting there is only a small window of opportunity for insurers to engage and build relationships with small businesses.

 

It was also found that global cyber insurance for SMEs is extremely low, with just 12% of UK firms and 16% globally currently covered, despite an additional 46% saying it could apply to their business.

 

“Despite some progress, our research shows there is still so much more to play for in closing this insurance gap,” Bichard continued.

 

“Using technology, insurers can also reinforce the value they bring through providing greater coverage for current and emerging risks.”

 

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