New research from AXA UK has highlighted both the challenges and opportunities for insurers serving small and medium-sized enterprises (SMEs).
Surveying 2,000 UK adults, the study found strong public support for local businesses, with 77% advocating additional backing from government and local authorities. Rising operating costs, National Insurance Contributions, and high business rates are key pressures affecting SMEs, shaping their insurance needs and risk management priorities.
Tailored insurance solutions
The findings underline the need for tailored insurance solutions. SMEs face operational, property and liability risks, including business interruption, cyber exposures and regulatory compliance challenges.
High streets’ decline due to competition from online marketplaces and economic pressures adds to these risks, the research found, influencing underwriting and claims patterns. Insurers must develop coverage that reflects these vulnerabilities while remaining affordable and accessible.
Growing demand in certain segments
AXA UK's research also pointed to specific sectors, such as bakeries, farm shops and greengrocers, where demand is growing. Understanding sector-specific risks enables insurers to design products that align with both the operational realities and growth ambitions of these businesses, the research found.
Furthermore, SMEs' roles in local employment and entrepreneurship make them strategically important clients for insurers, particularly when considering risk mitigation, continuity planning and community resilience.
Jon Walker, CEO of AXA Commercial, highlighted that supporting SMEs with appropriate insurance coverage is essential for business sustainability and community vitality.
Flexible insurance products
The research can guide the development of flexible SME insurance products, including business interruption coverage tailored to small retailers, sector-specific liability solutions, and policies that support resilience against rising operational costs.
The insights also suggest opportunities to integrate risk management services alongside insurance offerings, helping SMEs proactively manage exposures such as supply chain disruptions, cyber threats, and property vulnerabilities.
By aligning future products with these evolving needs, insurers can strengthen relationships with SME clients, enhance retention, and position themselves as a partner in local economic resilience, while also supporting government and community initiatives aimed at sustaining small businesses across the UK.
