SME Insurance Market

Global SME Insurance Market Size (2024 to 2029)

The global SME insurance market size was worth USD 22.8 billion in 2023 and is anticipated to be valued at USD 24.23 billion in 2024 and USD 32.8 billion by 2029, growing at a CAGR of 6.25% from 2024 to 2029.

Current Scenario of the Global SME Insurance Market

Small and medium-sized enterprises (SMEs) account for the vast majority of businesses globally. These businesses are more vulnerable to financial crises in terms of supply and demand than larger businesses. They're also more susceptible to demand-side shocks and can only survive situations for so long. SME insurance is insurance provided to small and medium-sized enterprises to limit their liabilities in a possible unfavorable event to assets, property, or the entire business.

The increased uncertainty in businesses and rising fire and theft losses are driving the growth of the SME insurance market. The expansion of the worldwide SME insurance market is further driven by the increase in fire incidents. Because small and medium firms operate on a small scale and do not offset these losses, these incidents have significantly impacted overall profit and survival. As a result, insurance policies that cover this market component are likely to support market growth. Furthermore, theft losses that occur during the passage of goods in businesses will help to expand the global market growth.

Denial of claims and slow payments are hampering the market growth of the SME insurance market during the forecast period. Furthermore, many claims take time to process because insurance firms must examine the damage and calculate an accurate loss accounting. The amount of time and effort necessary can be frustrating and result in a negative outcome for the company claimant.

Impact of COVID-19 on the Global SME Insurance Market

COVID-19 harmed SMEs, resulting in a loss of operations and revenue generation due to a global lockdown, which resulted in massive unemployment around the world. In addition, the SME insurance market also suffered as premium rates were significantly reduced to reduce the burden on SMEs, resulting in revenue loss for insurers. However, the corona crisis also provided an opportunity for insurers to extend their services online via Insurtech and thus safeguard SMEs from digital threats. 

REPORT COVERAGE

SEGMENTAL ANALYSIS 

Global SME Insurance Market Analysis By Product Type

The SME insurance market is augmented into property insurance, public liability insurance, workers' compensation insurance, and goods in transit insurance based on product type. The property insurance segment holds the largest market share due to increased demand for solutions that limit businesses' liabilities.

Global SME Insurance Market Analysis By Distribution Channel

The global SME Insurance market is augmented into Bancassurance, digital & direct channels, brokers, and agencies based on distribution channels. Among the other distribution channels, the Agency is expected to be the fastest-growing segment during the forecast period. 

REGIONAL ANALYSIS 

The Asia SME Insurance Market is projected to grow at a promising CAGR during the forecast period. According to Sanjeev Mantri, Executive Director, ICICI Lombard General Insurance, no single insurance platform allows SMEs in India to buy everything online — from insurance quotes to policy issuance. China has the largest share of SME insurance in the Asia market, with premiums exceeding 30% in 2018. Japan is up next.

In 2019, the UK SME market generated approximately 8.3 billion pounds in gross written premiums (GWP), up 1.0 percent from the previous year. The market is expected to generate $8.9 billion in GWP by 2024. The European SME insurance market was valued at 400 billion Euros in 2019, with SMEs accounting for 65 percent of private-sector employment.

In Canada, more than half of small businesses have seen their insurance prices rise in 2020, with one in six reporting a 25 percent or more increase. Firms in the hotel (25 percent), transportation (23 percent), and agriculture (22 percent) sectors were more likely than others to report a premium increase of 25% or more in the previous year. Furthermore, around 9% of all organizations claimed they could not locate an insurer ready to provide coverage for their company needs in the last 12 months. In terms of individual industries, 14% of hotel organizations and 12% of transportation businesses reported they could not obtain coverage in the previous year.

Only one out of every 50 enterprises in Brazil's commercial sector have at least 50 employees, making it a mid-sized company. SMEs in Brazil account for 62 percent of national employment and 50 percent of national value-added, which are significant figures although they are lower than the OECD norms of 70 percent and 55 percent. On the other hand, Brazilian SMEs provide a substantially smaller contribution to industry employment and value-added, accounting for almost 50 percent and 29 percent of total work and value contributed, respectively, compared to 56 percent and 39 percent in the OECD region. In Brazil, SMEs account for 79 percent of trade-based employment, higher than the OECD average (73 percent). Further disaggregation reveals that the share of trade-based work in micro-enterprises in Brazil and the OECD area is equal (39 percent and 40 percent, respectively). The primary variation is in the following small-size class (10-49 employees). This accounts for 28% of trade-based employment in Brazil, compared to 20% in the OECD, implying potential hurdles to corporate scale-up in the trade sector.

In Kenya, SMEs account for less than a third of the overall insurance market premium. The significant challenges that Kenyan SME owners face in 2021 are access to funding, harassment by government officials, insufficient business management skills, and the impact of COVID-19.

The small company sector in Australia (comprised of fewer than 250 employees) is large, with over two million businesses. These industries employ about 70% of the workforce and contribute nearly 40% of the country's GDP. The SME insurance market currently amounts to $9.4 billion in general insurance premiums. Moreover, according to a recent analysis by the Insurance Council of Australia, 13% of these businesses are uninsured, and 1.9 percent are underinsured. 

KEY PLAYERS IN THE GLOBAL SME INSURANCE MARKET

Companies playing a major role in the global SME insurance market include AIA, AIG, AXA, Tokio Marine, Sompo, Allianz, PingAn, Chubb, Great Eastern, China Life and Others.

RECENT HAPPENINGS IN THE GLOBAL SME INSURANCE MARKET

• In 2019, Aon acquired CoverWallet, a US SME insurance platform, and has begun implementing its concept – a mix of digital and consulting services – in several markets.

• Digital Fineprint, a UK-based Insuretech firm, has transitioned from static data acquired through proposal forms to dynamic data found in thousands of open data sources online. The organization gathers data from various online sources and creates algorithms to pre-underwrite and assess the risk connected with SME applicants' actions. The system streamlines the underwriting process and generates an investigative dashboard with all accessible data. It also enables insurers to assess and analyze their whole portfolio, revealing their outlying SME clients that require specialized goods and services.

• Chubb LTD, a Zurich-based insurance firm, offers a service that goes beyond standard insurance coverage. In the case of a cyber crisis, SMEs will have access to an incident response team that will help them with anything from contacting authorities to addressing public relations or customer service issues. Chubb also connects SMEs to an ecosystem, making them more accessible. Chubb Studio is an "insurance in a box" solution that links to SMEs' systems to quickly provide modular coverages and embedded solutions.

DETAILED SEGMENTATION OF THE GLOBAL SME INSURANCE MARKET INCLUDED IN THIS REPORT

This research report on the global SME insurance market has been segmented and sub-segmented based on product type, distribution channel and region.

By Product Type

• Property Insurance
• Public Liability Insurance
• Workers Compensation Insurance
• Goods in Transit Insurance

By Distribution Channel

• Bancassurance
• Digital & Direct Channels
• Brokers
• Agency

By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa