United Kingdom (UK) Commercial Insurance Distribution 2020

United Kingdom (UK) Commercial Insurance Distribution 2020

Summary

Commercial insurance distribution is, and will continue to be, dominated by brokers. The need for advice when purchasing commercial insurance is apparent, and the ability for brokers to offer a range of products from different providers is attractive to stakeholders looking to protect their business as best as possible. Brokers are not as strong among SMEs, however, as policyholders are more likely to take command of the purchasing process and purchase insurance themselves. COVID-19 will have a multitude of effects on the various purchasing channels and it is yet to be seen which is strongest.

As the UK seeks to recover from one of its worst economic downturns, businesses will be keen to save money where possible, increasing the attractiveness of price comparison websites and the direct channel. Brokers’ relationships will also be strained, with their customers unhappy about coverage gaps in their business interruption insurance. On the other hand, it is now more apparent to businesses that coverage gaps exist, and brokers are best suited to identify and point these out to customers. Businesses will also be more interested in cyber insurance as more transition to full-time remote working. Brokers are key players in the distribution of these policies, which are new and confusing to many businesses.

The report provides an in-depth study into the most significant developments and recent trends within UK commercial insurance distribution. It discusses the influence of the differing purchasing behaviors of SMEs compared to larger corporate entities and pays particular attention to the roles and strategies of brokers (traditionally the main channel used by customers) within commercial insurance product distribution. The report also addresses the current challenges the market is facing, key regulatory factors, and the possible inclusion of new digital technologies to enhance the product selection and/or distribution process. It concludes with a five-year forecast for each distribution channel.

Scope

- Brokers’ share of the market remained unchanged, accounting for 78.7% of commercial gross written premium in 2019.
- 67% of SME insurance purchases are conducted online.
- Cross-selling products remains the main way that brokers seek to grow their business. Mergers and acquisitions also play a key role among international brokers.
- COVID-19 will have both positive and negative effects on distribution channels, but brokers are expected to strengthen their position in 2021.

Reasons to Buy

- Gain insight into how COVID-19 will affect commercial insurance distribution.
- Adapt your distribution strategy to ensure it still meets the needs of clients and intermediaries.
- Ensure you remain competitive as new innovations revolutionize the purchasing journey for clients and brokers.
- Benchmark yourself against other players in the market.
- Be prepared for how technology is set to impact the commercial insurance market.