Europe

SME reliance on key client emphasizes demand for COVID-19 cover, says GlobalData

Image

Nearly 30% of medium-sized small to medium enterprises (SMEs) in the UK are either very or extremely concerned about being overdependent on one client, according to GlobalData’s 2020 UK SME Insurance Survey. The data and analytics firm notes that this is likely to increase demand for pandemic-specific cover.

GlobalData analyst, Ben Carey-Evans, commented: “According to the survey, 27.9% of medium-sized SMEs are very or extremely concerned about overdependence on a key client. The percentages are only slightly lower for smaller-sized businesses, with 24% of small businesses displaying similar levels of concern. Similarly, 40.2% of medium-sized businesses are very or extremely concerned about an event that would stop them from trading. The standout reason for that this year will be government-enforced lockdowns, highlighting the severe impact they are having on SMEs.”

PR11345-01.png 

Carey-Evans continues: “Overdependence on one client is a significantly heightened concern during the current pandemic, and one that insurers should be aware of. It may increase the demand for new pandemic-specific business cover in order to protect against key clients going bust or having to stop business in periods of local or national lockdowns, for example.”

Over a quarter (25.4%) of medium-sized SMEs are extremely or very concerned that they are underinsured. 

Carey-Evans adds: “This is very likely to be connected to concerns surrounding overdependence on one client or an event that may stop them trading, as both would lead to losses that are currently uninsured.

“The uncertainty created by the COVID-19 pandemic means concerns and risks for SMEs are changing – and increasing. The likelihood of further lockdowns and prolonged periods of no trading for certain types of businesses, or clients of certain companies, makes it a very difficult risk to insure against. However, GlobalData’s survey shows that the level of concern will be high enough to create demand for innovative products. Therefore, brave insurers could create an extremely popular policy if they were able to better balance the cover required and the high level of risk.”

Trending
Share this Post:
Posted by IRL Staff

Advertisement

ad ad

Related articles

Patrick Rastiello joins Ardonagh Specialty to lead North America Reinsurance expansion

Ardonagh Specialty has appointed Patrick Rastiello as CEO* of its North American reinsurance operations.   Patrick will be responsible for building Ardonagh Specialty’s US reinsurance...

Global Markets Overview: February 2024

In this Global Markets Overview, we explore our global outlook and share what we think it means for 2024.  https://www.wtwco.com/en-gb/insights/campaigns/global-markets-overview As...

EAMONN CUNNINGHAM WINS RIMS HARRY & DOROTHY GOODELL AWARD

Risk Management Trailblazer Presented with RIMS Highest Honor for Lifetime Achievement in Risk Management  NEW YORK (February 13, 2024) – At the RIMS New Zealand and Pacific Island...

Insurer’s Lease More Than Doubles Its Chicago Office Space

Sompo International Plans Move to 46-Story Tower at 155 N. Wacker A global specialty insurance provider is more than doubling the size of its Chicago office in a move a few blocks north, bucking the trend...

Haynes and Boone, LLP is pleased to announce that Peter A. Halprin has joined the firm as a Partner

Haynes and Boone, LLP is pleased to welcome Insurance Recovery Partner Peter A. Halprin to the firm’s New York City office. A Chambers USA-ranked attorney, Peter joins from Pasich LLP, where...

LIO Specialty Launches Revolutionary Online Portal for Life Science Insurance Solutions

Leading the Excess and Surplus Lines Market with Innovative Coverage for Cannabis and Nutraceutical Industries  West Conshohocken, PA– LIO Specialty Insurance Company proudly announces the launch...