This development ’raised the risk’ of underinsurance, says insurer

One in five small and medium sized enterprises (SMEs) across the UK have begun to reduce the level of their insurance coverage, new figures have revealed.

Data collected by researcher OnePoll and shared by Allianz yesterday (22 March 2023) surveyed 500 SMEs on their biggest day-to-day challenges.

It found that 60% kept their insurance cover unchanged over the last 12 months, while 21% increased it.

However, 19% of respondents reduced their cover, with data revealing a similar proportion were planning on doing the same over the next 12 months.

Allianz warned that this development “raised the risk” of underinsurance.

“We’ll continue to work with our broker partners to ensure that our customers have the right level of protection, especially in these turbulent times,” Helen Bryant, director of digital trading at Allianz Commercial, said.

‘Crucial role’

The data also revealed that 71% of respondents said the cost of living crisis was having a negative impact on their business – in the last 12 months, some 46% of SMEs said they changed the way they were operating in order to save energy.

Bryant said SMEs were having to be “increasingly agile and adapt their business models or modify their operations”.

“These agile entrepreneurs need to let their insurance provider know when they’ve made significant changes as this could lead to gaps in cover,” she added.

“In this regard, brokers play a crucial role – their expertise will help businesses have the right protection for their changing needs.

“In this way, the insurance industry can really support business diversification.”