Brokers remain the most popular channel for purchasing insurance among SMEs in the UK, according to the UK SME Insurance - Purchasing Journey 2021 report from GlobalData.
Next to brokers, direct sales, banks and price comparison websites (PCWs) top the list in that order.
In 2021, brokers accounted for almost half of purchases. It shows that the personal touch that brokers offer is still unparalleled given their ability to provide advice on a range of products that best fit a business’s needs.
However, the broker share for the sole trader segment has fallen compared to 2020, with direct sales increasing as some insurers have become more aggressive in the market. As a whole, the direct channel saw a resurgence in 2021 from sole trader and micro-enterprise activity.
The same dip goes for bank shares after years of steady growth in the insurance market caused by the increase in direct sales and use of PCWs in 2021.
Meanwhile, PCWs have established themselves as an important channel for the distribution of certain general insurance products. Commercial vehicle insurance has become the product most sold through PCWs. However, PCWs will likely face limitations with what they can provide for larger businesses.
“[PCWs] do not offer advice, which means they are unlikely to increase their share much more due to the need for tailored advice,” GlobalData said in the report. “However, studies suggest that they will remain popular as a pre-purchase check among SMEs to see what other offers are available, even if they are not necessarily the final point of purchase.”
