British SMEs uninformed about business insurance
28 August 2015
New research by Royal London - the UK's largest mutual life, pensions and investment company – finds many decision-makers in small and medium-sized enterprises (SMEs) are unsure how their businesses is protected or what type of cover it has in place. The mutual says the findings of its survey, among 600 senior decision-makers, highlights a lack of understanding about how SMEs can protect themselves.
The survey, by YouGov, found almost a third (30%) of respondents hadn’t heard of ‘Partner’ (or shareholder) protection. More than half (55%) had heard of it but said their business does not have it in place. Meanwhile, almost a quarter (24%) confessed they hadn’t heard of ‘Business Loan’ protection and worryingly, very few (8%) said they have this kind of insurance in place.
Royal London is concerned that British SMEs are unaware of how insurance can protect different assets – people as well as goods. The research found over two fifths (44%) insure their ‘stock and equipment’ - over half (59%) said protecting stock and equipment was ‘important’, yet significantly fewer (40%) respondents felt that ‘key person’ cover was ‘important’.
The majority (77%) of those surveyed admitted that if a vital employee fell seriously ill, and was unable to work for more than six months, it would impact their business. In fact almost one in three (31%) predicted the impact would be ‘severe’. Despite this, over half (58%) confessed they have heard of key person but said their business does not have it in place – leaving their most vital staff unprotected.
Debbie Kennedy, Head of Proposition for Royal London’s intermediary division, said:
“We’re concerned to discover how awareness of business protection varies so widely among SMEs –many are woefully under-protected and uninformed about their options. For example, we found they are protecting their stock and equipment, but not factoring in cover for their key personnel.
“Running a business is relentless; when there are hundreds of priorities it can be hard to know what needs to be insured and what doesn’t. Getting an expert opinion will help a business put adequate protection in place. We urge SMEs to make time to understand the options, so they can put the right cover in place – to effectively safeguard their business.”
The research comes as Bright Grey – part of the Royal London Group - launches its new Business Protection Planner at businessprotectionplanner.com. Designed to raise awareness of the need for business protection, the Planner is aimed at advisers who are new to the protection market. It offers support to advisers throughout the journey, from identifying opportunities and providing the right cover for their client to setting up a plan.
“Our new Business Protection Planner is designed to help advisers grow their business. It explains the business protection process step-by-step, and outlines why business protection is relevant to many clients. It also illustrates how opportunities could exist within their current client bank, and provides advisers with the tools they need to start the sales conversation.”
Other key findings
Key Person insurance: respondents in two particular sectors are unaware of this protection - those in the retail market and IT & Telecoms industry (29% and 21%, respectively) had not heard of this cover.
Partner (or shareholder) insurance: awareness of this type of protection was mixed across individual sectors. More than a third (37%) of respondents in the retail sector hadn’t heard of it, and over a quarter (28%) in manufacturing had not. A similar amount (26%) in IT & Telecoms sector admitted they were unaware of it.
Business Loan protection: respondents in Manufacturing and retail were among the sectors least aware of this cover - over a quarter (26%) of those surveyed in these two sectors had not heard of it.
- YouGov surveyed 600 senior decision-makers in British businesses which employ 1 to 249 employees – considered to be small to medium-sized enterprises, or SMEs.
- The online survey was undertaken between 13th July and 13th August 2015. The figures have been weighted and are representative of British business size.
- The Department for Business, Innovation and Skills (BIS) estimates (Nov 2014) there are 5.2m small and medium-sized enterprises (SMEs) in the UK, employing 15.2m people.
For further information please contact:
Nancy Baynes: PR Manager: 0207 506 6585 / email@example.com
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £83.4 billion. Group businesses serve around 5.3 million policyholders and employ 2,922 people. (Figures quoted are as at 30 June 2015). The Group is currently moving all of its UK and Ireland life, pension and investment businesses under a new version of the Royal London brand. Scottish Provident and Bright Grey will rebrand as Royal London later in 2015; the Group's independent wrap platform will remain branded Ascentric.