Do you buy your car, house and life insurance online? According to the British Association of insurers, over half of personal motor insurance (56%) and a quarter of personal property insurance (27%) is purchased directly by consumers, which includes online sales via price comparison website. Now a Price Waterhouse Cooper survey seems to suggest that small businesses are turning to the internet to buy their business insurance, too.
UK SMES more digitally savvy than their worldwide peers
The survey of 2,100 small businesses from around the world showed that SMEs are increasingly buying their business insurance online, but that the UK leads the way.
46% of the UK small businesses surveyed said they had bought insurance online, but worldwide, this figure dropped to just 24%.
In the UK, 43% small businesses said they bought their most recent business insurance online, with 68% those who plan to switch insurance providers in the next two years saying they’d like to do so online. Over a third also said they would be willing to use sensor technologies in order to lower their insurance premiums.
Jim Bichard, UK insurance leader at PwC, commented:
“The UK insurance market has always been seen as one of the most mature, but our survey shows we can also be the most innovative. Taking a lead from the digital transformation seen in personal lines, UK insurers are now leading the way on how they interact online with small businesses.”
“In order to make the most of this growth opportunity, insurers need to focus on understanding the varied and complicated ways the UK’s small businesses function, as well as investing in ways to deliver a full range of products that will meet their needs.”
Personal Preference of Business Owners a Big Factor
The survey also found that more recently founded companies were more likely to be purchasing insurance online, and that unsurprisingly, the insurance purchasing behaviour within small businesses is influenced by the insurance buying preference of their founders.
The results showed that those SME owners or founders who purchased their personal insurances online were more likely to look to the internet for business insurance. Of the UK survey respondents who said they buy their personal insurance online, 64% said they would prefer to buy their business insurance online too.
Steven Gough, insurance director at PwC, said:
“By their very nature, small businesses with single owners or managers reflect the behaviours of their founders. As in their personal life, time-starved owners turn to digital channels to find the right insurance cover for their new venture. Insurers need to be ready to meet these customers with the right products and solutions and be able to offer online advice and guidance to help them make the right decisions.”
SMEs ‘Unknowingly Underinsured’
The survey also found that small businesses were unknowingly underinsured, leaving them vulnerable to large claims and legal costs if an incident occurs. Only 12% of UK SMEs said they had cyber insurance – even though an additional 46% acknowledged it could be applicable for their business. 14% didn’t have liability cover.
Globally, only half of the SMEs surveyed had indemnity cover.
Is your SME underinsured? Have you purchased cyber, liability and indemnity insurance to ensure that, in the event of a data leak or serious incident, your company is not crippled by a huge claim?
It’s easy to ignore these issues, telling yourself you don’t have the time or the money to investigate or purchase this kind of cover. But underinsurance could bring your company to its knees and possibly affect your personal finances too.
Don’t take the risk. Seek advice and ensure your business is adequately and thoroughly covered.