SME firms are ‘the sector that needs the most advice’ – Lee Mooney

Despite the insurance sector treating “small premium” SME customers as a “volume premium play”, these clients are actually “the sector that needs the most advice” to be properly protected. 

That was according to Lee Mooney, UK managing director at Markel, who was speaking as part of a panel entitled ’Small Business, Big Risk – Tackling SME Underinsurance’ at last week’s ABI Conference (3 February 2026).

The panel session was held to discuss the release of ABI research that shared the panel’s name, which was published in January to help SMEs better understand their insurance needs and address gaps in coverage.

In this research, which polled 1,002 UK SME decision makers across the latter half of 2025, it was discovered that 28% of sole traders had no insurance policies at all, while 39% of firms employing between one and nine people said they didn’t have compulsory employers’ liability cover.

And, despite Mooney’s assertion that SMEs represented the sector that most needed advice when purchasing insurance, these businesses relied heavily either on online comparison sites or directly purchasing cover from an insurer. 

For example, 39% of SMEs said they used an online comparison site when they purchased or renewed their business’ insurance. 

Mooney added: ”There’s a huge, huge burden on insurers now to make sure we promote, as a collective, advisory sales in the SME space. We are a complicated business and that complication, at times, gets transferred onto our customers as we make the point of sale too difficult.

“First and foremost, before we even get to risk management, we need to look at the absolute root cause of where the issues [with underinsurance] are – and that’s education.” 

SME diversity

In addressing the problems of SME underinsurance, the panel noted that it was sensible to not understand the sector as a monolith – the differences in insurance buying capabilities between sole traders and firms with up to 250 employees are vast, for example.

Martin McTague, national chair at the Federation of Small Businesses (FSB), joined Mooney on the panel. He said: ”You can oversimplify SMEs and assume they’re all very similar, but they’re not. There’s a vast spectrum of needs there. 

”The other problem is that SMEs will sometimes think they’ve got cover, but essentially they havent because they’ve not had the knowledge to explore [what they require] in detail. But, when considering needs, a lot of these businesses will be prioritising immediate pressures over what seem like esoteric pressures [such as underinsurance].” 

McTague provided an example of where the FSB had previously rolled cyber insurance into the FSB insurance scheme free of charge to members, but had seen very low takeup. When the FSB then removed this cover from the bundle of cover, there were no complaints about the lack of cyber coverage. 

”Nobody valued it, nobody wanted it. They wouldn’t even have it when it was free,” he explained. 

“There is a real problem with some categories – [the attitude can be] ’if someone tries to ask me to buy insurance for something that seems obscure, I’m just just not going there’.” 

In response to the challenge of awareness and knowledge of cover, Mooney said: “You only know what you know – so, via online trading, where we expect SMEs to go through the journey and identify the covers they need, they’ll only select what they think they need and what they may have had experience of before. 

”The SME business has not been educated around where the [coverage] gaps exist, what the emerging trends are or where we are from a cyber perspective, for example. Everything’s just out there in volume and we expect people to pick it out of the cloud.

“We need to break that annual cycle from purchasing insurance to renewing insurance, purchasing insurance to renewing insurance, which is a very binary relationship. We need to provide advice throughout that cycle so, if an SME is paying that premium and needs advice, we can be there to help and mitigate risk before it happens.”