UK SME Insurance: The Direct Channel 2016

UK SME Insurance: The Direct Channel 2016

  • Products Id :- VF0094IA
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  • Pages: 26
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Executive Summary

Changes in SME distribution are primarily being driven by shifting preferences in purchasing method as opposed to channel. The preference towards online purchasing initially provided the direct channel with an opportunity to grow. However, as brokers have begun to move into the online space for SMEs, their market position has strengthened at the expense of direct insurers. The direct channel has therefore slightly lost share in the distribution of insurance for SMEs in 2016.

Micro-enterprises have the greatest affinity for purchasing direct from an insurer. They have the smallest risks, which makes them more suited to purchasing a commoditized product online. SMEs that purchase direct from an insurer view both the level of cover and the price of premium to be of equally high importance, highlighting that they are looking for a product that offers value for money. Customers are loyal to the direct channel, with over three quarters of SMEs that purchased their last policy directly not considering switching their route to market. Although channel loyalty is high among SMEs overall, of those that are considering changing their route to market, most intend to switch to a direct insurer. AXA is the dominant insurance provider for SMEs purchasing direct. Direct Line, Hiscox, Zurich, and NFU Mutual are also popular choices.

Key Findings

20.2% of SMEs purchased direct from an insurer in 2016.

AXA is the leading direct SME insurance provider, with 23.5% of the SMEs that purchased direct choosing the provider in 2016.

Customers are loyal to the direct channel, with 77.8% of SMEs that purchased direct not considering switching to a different type of provider.

After falling to a four-year low of GBP6.64m in 2014, expenditure on business advertising increased by 9.9% to GBP7.30m in 2015.


Verdict Financial's "UK SME Insurance: The Direct Channel 2016" report discusses the significance of the direct channel within the SME market. It examines the values of customers purchasing direct from their insurer, analyzes customer loyalty and switching, and highlights the most popular direct insurers among customers using our 2016 UK SME Insurance Survey.

Reasons To Buy

Adapt your distribution strategy to ensure it is efficient and still meets customer purchasing behavior.

Understand what customers want from a direct insurer in order to enter or remain competitive with the channel.

Benchmark yourself against others operating within the direct channel.

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Contact Us:
Ken Research
Ankur Gupta, Head Marketing & Communications



The direct channel has lost share as brokers move into the online space

Key findings

Critical success factors



Brokers are gaining share of product distribution at the expense of direct insurers

The direct channel is most popular among micro-enterprises

The direct channel is competitive against brokers for home-based SMEs



The direct channel is expected to see growth within the SME market

To attract customers direct insurers must offer products that offer good value for money

Most SMEs purchasing direct are not looking to change their route to market

Most SMEs considering switching will move to the direct channel at renewal

AXA remains the leading direct insurer for SMEs

AXA dominates the SME market for customers purchasing direct

AXA, Direct Line, and Hiscox are the top providers across most products for direct SMEs

Aviva has brought back its direct online offering for micro-SME business insurance

Direct insurers must advertise to raise brand awareness and attract customers

Business insurance advertising increased in 2015, and is expected to rise again in 2016

Direct Line and Hiscox are the only insurers that notably advertise their offerings







Further reading

About Verdict Financial


Figure 1: Direct insurers are losing share of SME product distribution to brokers

Figure 2: Micro-enterprises have the greatest affinity for the direct channel

Figure 3: The direct channel is more popular among home-based SMEs

Figure 4: The most important reasons for choosing a direct insurer are price and cover provided

Figure 5: SMEs are loyal to the direct channel

Figure 6: SME switching intentions are low, but the direct channel is expected to see growth

Figure 7: AXA is the top performer in the direct insurance segment

Figure 8: Summary of the top five insurers for SMEs purchasing direct, by product

Figure 9: Business insurance marketing increased annually by 9.9% to GBP7.3m in 2015

Table 1: Majority channel used for purchase: broker and insurer (direct), by business size, (%)

Table 2: Top performing direct insurers in liability, commercial property, and commercial motor, 2016

Table 3: Top performing insurers in specialist commercial product lines, 2016

Table 4: Total business insurance advertising expenditure (GBP), 2011-H1 2016

Table 5: Business insurance advertising by the five highest spending brands (GBP), H1 2016

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AXA, Direct Line, Hiscox, Zurich, NFU Mutual, Simply Business, YOUR Insurance,,,,, BUPA, Allianz, Admiral, CS Healthcare, AIG, Aviva, Trade Direct, RAC Insurance, Ecclesiastical

Direct, SME, micro-enterprise, micro enterprise, channel, distribution, online

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