New analysis from Premium Credit, the insurance premium finance company, reveals that the construction sector borrows the most to fund insurance, while the wholesale and retail trade sector is experiencing the fastest growth.
According to Premium Credit’s Insurance Index, which tracks insurance purchasing and financing trends, 55% of SMEs now use some form of credit to pay for insurance, borrowing an average of £1,080. Approximately 15% report borrowing more than £3,000.
Construction firms were the most likely to use credit, accounting for 14.3% of all net advances from Premium Credit last year. This represents a 1.5% increase from 2022 and a 1.9% rise from 2021.
The professional and scientific sector had the second highest share of net advances at 12.5% last year, followed by manufacturing at 10.4%, wholesale and retail trade at 8.8%, and land transport at 8.1%.
Meanwhile, the wholesale and retail trade sector is showing the most significant growth, with its share of net advances increasing by 1.7% from 2022 and 3.4% from 2021.
The Insurance Index also indicates that around 50% of SMEs report increased business insurance costs in the past 12 months, with 12% noting substantial increases. Approximately 17% of firms have cut other business costs due to rising insurance premiums over the past two years.
Jon Howells (pictured above), chief commercial officer at Premium Credit, commented that insurance is essential for business operations across various sectors, as demonstrated by consistent growth in net advances.
“Insurance is vital for business operations across a wide range of sectors as demonstrated by the strong growth in net advances we have seen year on year. It is particularly important in the construction sector, which is consistently the biggest sector for lending,” Howells said.
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