Small and Medium Sized Enterprises (SMEs) underpin the economy in almost every developed and developing nation. Companies with fewer than 250 employees account for 99% of all firms in the OECD nations, generating between 50% and 60% of value added2 and accounting for 70% of jobs on average.
SMEs are an essential market for the insurance industry, worth about €10 billion in annual gross written premiums in Germany and the UK each, and growth in the UK of 12% a year3. Yet SMEs struggle to find the right product at the right price, when their needs can be as complex as those of larger companies. For insurers, this particular segment is equally challenging to serve: SMEs demand personalised attention, but at a premium that doesn’t support this level of service.
Digital services could be the answer. At present, selling insurance to SMEs through digital channels is not straightforward. Many of the products they need are complex; products need tailoring to specific businesses; and SMEs want personalised advice before buying.
Nevertheless, a number of specialised online services have emerged, including comparison platforms such as Simplybusiness (UK) or Gewerbeversicherung24 (Germany). Is this a sign that SMEs are ready to embrace digital insurance services? We wanted to find out.