The small and medium-sized enterprises (SME) insurance market in the UK could exceed £8bn in gross written premiums in 2018, provided insurers embrace the digital era, according to a new report from Timetric UK FS Intelligence Centre.
The report says the SME non-life insurance market was worth approximately £7bn and is expected to rise further on the back of increasing numbers of SMEs and help from UK government initiatives along with the general upswing in the UK economy.
“With a lot of SMEs in the UK still not insured or underinsured, insurers can hope to deepen SME insurance penetration in the next four years, especially if they develop a truly digital mindset,” said Steffen Mueller, financial services analyst at Timetric.
“In a mobile society, user-friendly solutions for mobile devices to boost sales, customer service and data collection have become almost obligatory. However, it is engagement in cyber insurance that can actually provide a competitive edge.”
The UK government recently highlighted the lack of cyber insurance in UK firms, first and foremost in smaller businesses, where there is lack of awareness and budget for non-physical perils. A security breach, for instance, can cause enormous damage by destroying data, hardware and causing business interruption altogether. Following the example of the US insurance market, cyber insurance cover is expected to become a key business tool helping to protect against cyber-crime in the UK as well, according to the report.
“Cyber insurance is definitely a growth market. Insurance providers need to increase in-house expertise in this field, as there is evidence that many providers are still not comfortable with actively advising existing or potential clients on this topic,” Mueller added.