The findings from Consumer Intelligence’s latest report, SME Insurance in a Poly-Crisis Era, reveal a stark reality: while risk exposure is increasing, insurance coverage is going in the opposite direction.
Four in Five SMEs Are Underinsured
An estimated 80% of SMEs are underinsured. Many policies have outdated valuations, insufficient cover limits, or gaps where protection has been deliberately reduced to cut costs.
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51% of SMEs stopped buying at least one type of insurance in the past year, often property, vehicle, or liability cover.
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43% of business interruption policies have cover limits that fall short by an average of 53%.
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12% of SMEs have missed out on a claim payout in the past five years due to inadequate cover.
These numbers highlight a growing vulnerability: when crises hit, many SMEs may discover too late that their policies don’t provide the protection they expect.
The Risk and the Opportunity for Insurers and Brokers
For the insurance industry, widespread underinsurance is a double-edged sword. On one hand, it increases the risk of claim disputes, reputational damage, and regulatory scrutiny. On the other, it presents a chance for insurers and brokers to step up as trusted advisors.
The report outlines several strategies for the industry, including:
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Proactive coverage reviews that account for inflation and updated asset valuations
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Flexible payment and financing options to help SMEs maintain adequate cover despite cost pressures
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Educational outreach to raise awareness of underinsurance risks
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Innovative product design, such as usage-based cover and embedded insurance
By shifting the conversation from price to value, insurers and brokers can reframe insurance not as a grudge purchase, but as a cornerstone of business resilience.
Building Resilience Through Partnership
As Ian Hughes, CEO of Consumer Intelligence, notes: “The rising cost of insurance premiums is a challenge, but being underinsured or not having any cover at all is an even bigger concern.”
For insurers and brokers, this is a critical moment. Those who engage proactively with SME clients, provide clarity in complex times, and deliver flexible, value-driven solutions will not only reduce underinsurance rates but also earn lasting loyalty.
👉 Download the full report here: SME Insurance in a Poly-Crisis Era
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