Research and Markets: This Essential Report on Targeting SMEs in UK General Insurance 2009 is Now Available

November 11, 2009 8:08 AM EST

DUBLIN--(BUSINESS WIRE)-- Research and Markets (http://www.researchandmarkets.com/research/72f507/targeting_smes_in) has announced the addition of the "Targeting SMEs in UK General Insurance 2009" report to their offering.

This report provides a unique evaluation of the purchasing behavior of SMEs based on Datamonitor's exclusive SME survey, giving the reader an edge in this dynamic area. The report also explores how SME's attitudes differ depending on size, allowing for more precise targeting of market segments.

Scope

    --  A detailed look into SMEs' insurance purchasing patterns by company size
    --  An evaluation of the potential for growth for direct insurers and
        bancassurers in the SME sector
    --  Action points detailing potential strategies for different providers
        wishing to target SME business

Highlights of this title

    --  Of the SMEs in Datamonitor's survey, 46.0% indicated that they purchased
        just package products in 2008. The popularity of package products
        reflects the success of simple packages like shops and offices policies
        that can accommodate a broad range of risks, but also the more niche
        products designed for specific trades, such as the motor trade.
    --  Overall, 34% of the SMEs surveyed were willing to consider arranging
        their insurance over the telephone. Of those that were willing to
        consider a telephone arrangement, 51.0% cited speed as a reason why they
        would.
    --  A majority of SMEs that would buy online were inclined to purchase less
        complex products such as public or employers' liability, or commercial
        motor.

Key reasons to purchase this title

    --  Improve customer retention by understanding SMEs' reasons for staying
        with a provider, as well as their reasons to switch providers
    --  Boost customer acquisition by understanding what insurance products SMEs
        are willing to buy online and via the telephone
    --  Understand the current competitive environment of the SME sector in
        relation to competitor strategies and current distribution trends

Key Topics Covered:

Executive Summary

    --  The SME market is attractive for its sheer size, though the recession
        will have an impact
    --  The SME market was estimated to be worth 5.4 billion in 2008
    --  The recession has put pressure on SMEs and is resulting in more
        insolvencies
    --  Package products are the principle means through which SMEs purchase
        their cover
    --  SME insurance needs are varied and encompass a range of products
    --  Face-to-face arrangement through established brokers is the main means
        by which SMEs arrange their cover
    --  Brokers dominate among all sizes of SMEs, though they have greater
        market share among larger SMEs
    --  Face-to-face arrangement is popular in the market but is more prevalent
        among larger SMEs
    --  Most SMEs learn of their insurance provider through previous experience
        or proximity
    --  SMEs are generally loyal to their existing insurance provider but there
        is significant churn to exploit
    --  More SMEs considered a change of provider in 2009 than in 2008
    --  Approximately one third of the SME insurance market would be willing to
        arrange their cover over the telephone
    --  Most of the SME market is unwilling to use the internet to arrange their
        insurance cover
    --  SMEs are most open to purchasing motor and less complex liability
        products online
    --  Insurance providers need to make the necessary investments so they can
        offer quality low cost products
    --  The recession will make SMEs more price sensitive, requiring brokers to
        invest in the ability to deliver at a lower cost
    --  Direct players need to play up the potential cost savings which an SME
        can obtain from going direct
    --  Banks can market themselves as low cost alternatives, appealing to SMEs'
        price sensitivity

Market Context

    --  Introduction
    --  The SME market was worth over 5 billion in 2008, with rates hardening in
        motor
    --  The SME market was estimated to be worth 5.4 billion in 2008
    --  A large proportion of brokers reported no change in premium rates over
        the last year
    --  The SME market is attractive for its sheer policy volume, though the
        recession will have an impact
    --  The number of UK enterprises grew by 4.7% to 4.8 million
    --  More than 99% of UK companies are small businesses
    --  The recession has put pressure on SMEs and is resulting in more
        insolvencies
    --  SMEs often require a range of cover, generating a wide range of premiums
        for insurers
    --  Package products are the principle means through which SMEs purchase
        their cover
    --  SME insurance needs are varied and encompass a range of products
    --  SME insurance policies can vary considerably in value, depending on the
        size of the risk
    --  Affinity propositions are increasingly targeting the SME market
    --  Traditional affinity partnerships in the SME market have been based on
        trade associations
    --  There has been significant interest from some personal lines affinity
        players in distributing SME insurance
    --  Two high profile affinity partnerships have announced their expansion
        into the SME insurance market
    --  Kwik Fit has teamed up with Moorhouse to target SMEs
    --  Heath Lambert and Fortis announced a deal to distribute SME insurance
        through the Post Office
    --  Several insurers have adapted their SME broker offering, reflecting the
        competitive nature of the market
    --  QBE has rolled out a range of online SME products
    --  MMA reworked and relaunched its SME product range
    --  Chaucer made changes to gear up for an SME push
    --  RSA is aiming to increase its SME market share with better and faster
        service
    --  SME insurance giant Aviva closed its direct commercial operations,
        concentrating on broker distribution
    --  Brit Insurance expanded its SME product range with a new PI product
    --  Allianz Commercial is targeting growth in SME business in Scotland
    --  The motor trade has attracted a great deal of attention for those
        insurers looking at growth in the SME market
    --  AXA redesigned its motor trade product
    --  NIG is focused on the medium-sized motor trade business
    --  MMA launched a new motor trade internal risks product at the start of
        2009
    --  Many brokers have organic or acquisition driven growth ambitions for the
        SME market
    --  AXA rebranded Venture Preference and continued to add to it with
        acquisitions
    --  Swinton has identified growth in the SME market as a priority, supported
        by its consolidation activities
    --  Swinton has approached nearly half of the respondents of a Datamonitor
        broker survey with an offer for their business
    --  Aon launched a credit insurance service to SMEs and acquired the
        specialist broker Supercover
    --  Marsh is reaching out to regional brokers in an SME push
    --  A new consolidator is looking to create a leading SME insurance presence
    --  Broker Direct has also announced a number of acquisitions, and Our
        Network has expanded rapidly
    --  JLT has acquired Ingham & Co to add range to its Thistle Underwriting
        platform
    --  Broker-owned MGAs have become a common feature in the commercial
        insurance market

Distribution Dynamics

    --  Introduction Face-to-face arrangement through established brokers is the
        main means by which SMEs arrange their cover
    --  Brokers dominate among all sizes of SMEs, though they have greater
        market share among larger SMEs
    --  Face-to-face arrangement is popular in the market but is more prevalent
        among larger SMEs
    --  Most SMEs learn of their insurance provider through previous experience
        or proximity
    --  SMEs that are clients of direct insurers, are more likely to have used
        the internet or a mail shot to learn about their provider
    --  SME insurance providers are generally good at achieving high levels of
        customer satisfaction
    --  SMEs are generally happy with their insurance provider
    --  SMEs tend to prefer longstanding relationships with their providers,
        making an initial pitch critical
    --  After their first year of trading, approximately one fifth of SMEs with
        insurance change their provider
    --  Whilst SMEs generally value provider advice, medium-sized companies are
        particularly receptive to it
    --  Clients of direct insurers value advice the least
    --  Clients that arrange their insurance face-to-face are most keen to
        receive advice
    --  When choosing a provider, SMEs value good service almost as much as
        price
    --  SMEs are sensitive to price, regardless of their size
    --  SMEs that purchase online appear to be the most price sensitive
    --  SMEs that are clients of direct insurers are more likely to have chosen
        their provider on the basis of price
    --  Many SMEs rely upon their insurance providers for extra services
    --  The majority of SMEs receive some services from their insurance
        providers, with legal advice the most common
    --  Micro SMEs are less likely to use extra services from their provider,
        though legal advice is most common
    --  Most SMEs that receive additional services from their insurance provider
        do so for free
    --  The most desired services are risk management and legal advice
    --  Approximately one fifth of SMEs that do not receive extra services are
        interested in obtaining them

Potential Switchers

    --  SMEs are generally loyal to their existing insurance provider but there
        is significant churn to exploit
    --  Approximately one fifth of respondents started their relationship with
        their provider in the last two years
    --  SMEs that have been trading for five to 10 years have typically been
        with their provider the longest
    --  Banks had acquired the largest proportion of new business in the SME
        insurance sector
    --  Price was the major driver behind SMEs switching their insurance
        provider
    --  The number of SMEs thinking of switching has risen to higher, historic
        levels
    --  More SMEs considered a change of provider in 2009 than in 2008
    --  A variety of companies, from different industries, believe they will
        change their provider over the next year
    --  SMEs that use the internet to arrange their insurance are the most
        likely to search out a new provider
    --  Price is the leading reason why SMEs think that they will change
        insurance provider
    --  SMEs are open to alternatives to face-to face distribution, though the
        majority still require convincing
    --  Micro SMEs are the most open to buying their cover over the telephone
    --  Approximately one third of the SME insurance market would be willing to
        arrange their cover over the telephone
    --  Micro SMEs are attracted to the speed and expected cost savings of
        telephone arrangement
    --  The internet is attractive to SMEs due to its convenience
    --  One third of SME insurance buyers would be willing to arrange their
        cover online
    --  Micro SMEs are more likely to consider arranging their commercial
        insurance online
    --  Most SMEs remain opposed to telephone arrangement, though their reasons
        are varied
    --  The fear of not obtaining the proper cover and expert advice is holding
        most medium-sized SMEs back from the telephone
    --  Most SMEs prefer the personal contact of face-to-face arrangement rather
        than the speed of the telephone
    --  Two thirds of the SME market would not consider an online sales process
        when arranging their cover
    --  Most of the SME market is unwilling to use the internet to arrange their
        insurance cover
    --  Medium-sized SMEs are the least likely to consider an online option
    --  Of those SMEs willing to buy insurance online or via the telephone,
        liability products were the most popular
    --  SMEs are most open to purchasing motor and less complex liability
        products online
    --  Micro SMEs were most likely to consider purchasing public and employers'
        liability over the internet
    --  Banks and direct insurers can sell into a sizable minority of SMEs but
        still need to convince most to give them a chance
    --  Approximately one third of SMEs will use a bank as their insurance
        provider
    --  Micro SMEs are willing to buy their insurance from a bank if the price
        is cheaper
    --  Almost a third of SMEs are willing to arrange their insurance through a
        bank
    --  The majority of SMEs are willing to purchase their cover direct
    --  Almost two thirds of micro SMEs are open to buying their insurance
        direct from an insurer
    --  Cost savings are the main drivers behind SMEs' willingness to consider a
        direct insurer
    --  There remain significant obstacles to many SMEs considering banks as
        viable insurance providers
    --  Medium-sized SMEs view banks as lacking expertise and reputation
    --  SMEs are generally content with current providers and doubt banks have
        the expertise to sell insurance
    --  Direct insurers face less opposition but still have several issues to
        address
    --  Direct insurers still have to overcome SMEs' current contentment
    --  Medium-sized companies retain doubts about the direct insurance channel

Action Points

    --  Brokers can focus on delivering services and low cost products
    --  The recession will make SMEs more price sensitive, requiring brokers to
        invest in the ability to deliver at a lower cost
    --  Flexibility and understanding during the recession can prove beneficial
    --  Face-to-face arrangement is popular but investments in online and call
        center distribution can yield additional business
    --  Legal advice and risk management are the key additional services to
        offer to medium-sized SME clients
    --  Direct players need to target smaller SMEs and address their perceived
        faults
    --  Direct insurance players are well suited to the micro end and should
        focus on these customers
    --  Direct players need to play up the potential cost savings which an SME
        can obtain from going direct
    --  Stepped up advertising campaigns are necessary to drive consumers to a
        direct insurance operation
    --  Direct players need to highlight the convenience and relative ease of
        their distribution platforms
    --  Banks need to address their image as expensive providers with no
        expertise to break into the micro SME market
    --  Banks can market themselves as low cost alternatives, appealing to SMEs'
        price sensitivity
    --  Targeting micro SMEs and start-ups would exploit some of banks' natural
        affinities
    --  Banks need to reinvest in their overall reputations, which appear to
        have suffered among SMEs

APPENDIX

Companies Mentioned:

    --  AXA
    --  Fortis
    --  HSBC Holdings plc
    --  Jardine Lloyd Thompson Group plc
    --  Lloyds Banking Group plc
    --  London Stock Exchange Group Plc
    --  RBS Insurance

For more information visit http://www.researchandmarkets.com/research/72f507/targeting_smes_in

Source: Datamonitor

    Source: Research and Markets

Stocks Mentioned

Related Entities

• HSBC

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