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UK SME Insurance: Competitor Dynamics 2016

Published By :

Verdict Financial

Published Date : Oct 2016

Category :

Banking

No. of Pages : 44 Pages

Summary
The SME market is important for commercial insurers as SMEs account for the majority of the UK economy. With insurers increasingly targeting the segment, the market is very competitive. Insurers are developing their propositions to cater for small and medium sized enterprises. E-trade is becoming more of a central focus for the insurers in this space, as is the distribution of high-volume, low-value business via the direct channel. Organizations within the market vary in size and so have different insurance needs and service preferences, which means the SME market should not be categorized as one segment. Direct propositions are primarily being developed by those looking to target sole traders and micro-sized enterprises with packaged products. Meanwhile e-trading is of greater focus for insurers targeting small and medium-sized enterprises that have greater affinity to purchase through a broker.

AXA and Aviva dominate the SME insurance space across the majority of commercial products, according to Verdict Financials 2015 UK SME Insurance Survey. Other insurers present in the market play to their strengths when servicing SMEs. Hiscox and Zurich are popular providers for liability products, whereas Allianz and Direct Line are strong in servicing SMEs to insure commercial motor vehicles. As the number of providers supplying commercial insurance solutions grows, and there is more choice available to potential customers, those offering the best deals in terms of the level of cover, the quality of the overall package, and price are most likely to succeed.

Key Findings
- AXA and Aviva dominate the SME insurance space, with 21.4% and 15.9% of SMEs respectively holding a commercial insurance policy with these providers.

- Brokers place the most SME business with Allianz, Aviva, and AXA.

Synopsis
Verdict Financials UK SME Insurance: Competitor Dynamics 2016 report looks at which insurers lead the way in the SME segment and how they are developing their propositions, as well as highlighting how competitor positions vary between micro, small, and medium enterprises. It examines which insurers are winning over brokers and which companies SMEs are placing their business with.

ReasonsToBuy
- Benchmark yourself against the rest of the market.

- Ensure you remain competitive as new innovations and insurance models begin to enter the market.

- Adapt your distribution strategy to ensure it is efficient and still meets customer purchasing behavior.
Table of Contents
EXECUTIVE SUMMARY
AXA and Aviva dominate the SME insurance space
Key findings
Critical success factors
THE SME INSURANCE MARKET AND ITS TOP COMPETITORS
Introduction
Aviva, Allianz, and AXA are the top SME insurers used by brokers
Allianz replaces Aviva as the top insurer for packaged SME products
The gap between Aviva and Allianz for brokered non-packaged business has narrowed
Insurers continue to move into the direct channel for SMEs
Hiscox, AXA, Allianz, and Direct Line are already distributing directly
Aviva has brought back its direct online offering for micro SME business insurance
Travelers Europe enters the direct channel to provide micro-SMEs with cover
Insurers continue to invest in e-trading platforms
Zurich continues to improve its SME e-trading platform ZTrade
Hiscox launches Hiscox Trader, a new e-trading system for commercial brokers
Insurers continue to join Open GI's SME panel
Insurers aim to tackle SME underinsurance
Allianz has removed average clauses and is working with brokers to highlight areas of potential underinsurance
Aviva has been extending policy limits and removing average clauses from SME products
NIG has developed an online cost calculator tool for brokers
Insurers continue to launch commercial products for SMEs
RSA launches SME products exclusively for the Broker Network
Hiscox launches new product to cover SMEs against economic crime
PRODUCT POSITIONING
AXA, Aviva, Allianz, Zurich, Direct Line, and Hiscox are the top SME insurers
The dominant SME insurers also feature as the top insurers in commercial lines
AXA dominates the SME market as the top provider for the majority of products
Aviva is competitive within the SME segment but still ranks second to AXA
Aviva hopes its digital directive will help it gain share on AXA for SMEs
Allianz performs well in business interruption and commercial fleet motor insurance
Zurich is popular for property insurance and liability cover
Hiscox is the preferred insurance provider among micro-enterprises
Direct Line is expectedly strong in the motor product lines
Top five insurers by product
Business interruption insurance
Directors' and officers' liability insurance
Employer's liability insurance
Key man insurance
Personal accident and business travel insurance
Property insurance
Professional indemnity insurance
Public liability insurance
Private medical insurance
Cyber insurance
Commercial vehicle insurance: company cars - single
Commercial vehicle insurance: company cars - fleet (more than five)
Commercial vehicle insurance: van - single
Commercial vehicle insurance: van - fleet (more than five)
Commercial vehicle insurance: other e.g. coaches/farm vehicles - single
Commercial vehicle insurance: other e.g. coaches/farm vehicles - fleet (more than five)
APPENDIX
Abbreviations and acronyms
Definitions
Brokers
Direct
SME
Methodology
Bibliography
Further reading
About Verdict Financial
Disclaimer

List of Tables
Table 1: Insurers most used by brokers for packaged SME insurance (percentage of respondents), 2013-16
Table 2: Insurers most used by brokers for non-packaged SME insurance (percentage of respondents), 2013-16
Table 3: Top five insurers of the total UK commercial insurance market in 2015
Table 4: SME product share held by AXA and Aviva (percentage of respondents), 2016
Table 5: Top five insurers for business interruption insurance (percentage of respondents), 2016
Table 6: Top five insurers for directors' and officers' liability insurance (percentage of respondents), 2016
Table 7: Top five insurers for employers' liability insurance (percentage of respondents), 2016
Table 8: Top five insurers for key man insurance (percentage of respondents), 2016
Table 9: Top five insurers for personal accident and business travel insurance (percentage of respondents), 2016
Table 10: Top five insurers for property insurance (percentage of respondents), 2016
Table 11: Top five insurers for professional indemnity insurance (percentage of respondents), 2016
Table 12: Top five insurers for public liability insurance (percentage of respondents), 2016
Table 13: Top five insurers for private medical insurance (percentage of respondents), 2016
Table 14: Top five insurers for cyber insurance (percentage of respondents), 2016
Table 15: Top five insurers for commercial vehicle insurance: company cars - single (percentage of respondents), 2016
Table 16: Top five insurers for commercial vehicle insurance: company cars - fleet (percentage of respondents), 2016
Table 17: Top five insurers for commercial vehicle insurance: van - single (percentage of respondents), 2016
Table 18: Top five insurers for commercial vehicle insurance: van - fleet (percentage of respondents), 2016
Table 19: Top five insurers for commercial vehicle insurance: other e.g. coaches/farm vehicles - single (percentage of respondents), 2016
Table 20: Top five insurers for commercial vehicle insurance: other e.g. coaches/farm vehicles - fleet (percentage of respondents), 2016

List of Figures
Figure 1: Brokers now place the most business with Allianz for packaged SME insurance
Figure 2: Aviva remains brokers' favorite non-packaged insurer, although to a lesser extent in 2016
Figure 3: Power Place is growing its panel of SME insurers and the range of products it offers
Figure 4: AXA is the leading SME insurance provider, followed by Aviva
Figure 5: Summary of the top five insurers, by product, for all SMEs
Figure 6: AXA is the most popular insurer among SMEs requiring business interruption insurance
Figure 7: AXA leads the way in directors' and officers' insurance
Figure 8: AXA and Aviva hold the greatest share of the employers' liability market
Figure 9: AXA and Aviva account for a third of the key man insurance market
Figure 10: Out of all products AXA holds the largest share of the personal accident and business travel insurance market
Figure 11: Zurich was the third most popular insurer among SMEs for property insurance
Figure 12: Hiscox is competitive within the professional indemnity insurance market
Figure 13: AXA tops the SME public liability market with a 14.9% share
Figure 14: BUPA pushes AXA into second place as the top private medical insurer for SMEs
Figure 15: AIG is among the top five insurers in the cyber market
Figure 16: Admiral features as the third most popular insurer to cover a single company car
Figure 17: AXA is the frontrunner in the company cars fleet segment, followed by Aviva
Figure 18: Admiral also features among the top five insurers for a single van
Figure 19: Fleet van insurance is the only product where Aviva holds the highest market share
Figure 20: Rural insurer NFU Mutual ranks in the top five insurers to provide single cover for another commercial vehicle such as coaches or farm vehicles
Figure 21: Allianz is a popular provider of fleet insurance for other commercial vehicles

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