Analysis

Briefing: Is embedded cover the answer to SME underinsurance?

By 2025-05-01T09:00:00

embedded insurance

Insurance firms partnering with vertical SaaS providers to provide easy to access, tailored cover can both futureproof themselves and address a perennial problem

Underinsurance has remained a stubborn and perennial issue for the industry to address – both brokers and insurers can end up looking incredibly bad to insureds if they are surprised, at the point of claim, to be told that their reinstatement costs are not fully covered by insurance. 

In September 2024, Gallagher estimated that nearly half of all UK commercial properties were underinsured, with the average shortfall in cover running at 40%. It is not difficult to imagine the stress this could cause business owners following a potentially catastrophic claim – not to mention the fact that this shortfall may lead to total business failures in some cases.

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