Page 21 - Insurance Times November 2020

counts for two-thirds of general insur- vey by GlobalData, a leading data and gross written premiums (GWP) will be
ance premium in 2019. Between Janu- analytics company. Only a very small subdued up to 2023, as consumers will
ary 2020 to June 2020, new vehicle percentage of SMEs expressed no con- take on greater risk in a bid to save
sales declined by 16.9%, compared to cern at all, which suggests that this money in the short-term. GlobalData
the same period last year due to re- new way of working will continue for initially forecast GWP in the pet mar-
duced consumer spending and the majority of SME employees until ket to reach £1.5bn by 2023, but this
lockdown restrictions. As a result, mo- the spread of the virus is curbed or a has been revised down to £1.3bn,
tor insurance premium is forecast to vaccine is found. This concern will lead solely due to COVID-19.
slow down to 1.3% in 2020. to significant changes in how SMEs in Jazmin Chong, Insurance Analyst at
Similar trend can be observed in prop- the UK operate, and, while commer- GlobalData, comments: “Despite the
erty insurance, which accounted for cial insurers are set to lose out, house- expected decline in growth, there are
10% of general insurance premium in hold insurers could capitalize. still opportunities for insurers. For ex-
2019. Due to suspension of economic Further results from GlobalData’s sur- ample, there has been an increase in
activity in Q1 2020, sales of commer- vey found that larger SMEs were animal adoption due to the COVID-19
cial properties fell by 5.4% in the first somewhat more likely to be very or pandemic. Pet insurers are now faced
half of 2020 on year-on-year as per the extremely concerned in comparison to with a unique opportunity whereby
National Bureau of Statistics. Slow- their small and medium-sized SME consumers have more time to adopt
down in residential property sales and counterparts. This may be simply be- routines that can include preventative
weak global economic outlook is ex- cause they have more staff to look af-
pected to limit property insurance ter, even though one staff member behaviors such as implementing a feed-
growth. contracting the virus could be more ing schedule.
To improve business activity, regulatory damaging to a company with fewer “At the same time, COVID-19 has cre-
employees. This level of concern may ated a situation where it is more diffi-
authorities are exploring new business
options. China Banking and Insurance be encouraging for employee benefit cult for pet owners to walk their dogs
Regulatory Commission (CBIRC) is pro- and health insurance providers – the or attend health checkups. Insurers
moting digitization. Furthermore, larger who are showing the most con- should be advising current customers
regulatory body is also encouraging cern are the most likely to have com- on how to overcome these challenges,
insurers to expand their offerings of mercial policies. or insurers could be left with exacer-
smaller product lines such as environ- Ben Carey-Evans, Insurance Analyst at bated claim numbers in the future.”
mental pollution liability cover to drive GlobalData, comments: “The survey Insurers in the market will need to find
new premium growth. also showed that 16% of SMEs had a solution to the current challenges
Mr Biswas concludes: “The ongoing reported significantly increased levels around claims and customer retention.
economic uncertainty compounded by of working from home, reducing the
risk of employees contracting the virus. This will be difficult, as the largest
the second wave of infections and three pet insurance providers -
worsening global trade scenario is ex- If home working continues for the fore-
Petplan, Animal Friends, and Tesco
pected to slow down growth in China’s seeable future, this could see busi-
general insurance industry. Despite nesses across the country move out of Bank - offer relatively homogeneous
push from regulators for a faster recov- cities - or at least reduce their office products.
ery, it is expected to be a protracted footprint, which would be a huge Chong adds: “In response to the
one.” blow to commercial property insurers. COVID-19 pandemic, Petplan and Ani-
With offices being swapped for homes mal Friends are offering payment flex-
UK SMEs concerned over more regularly, the opportunity may ibility for customers who are financially

staff contracting COVID-19 switch to home insurers, who could struggling. Yet, the majority of pet in-
upsell cover for equipment such as
will alter insurance propo- laptops.” surers have not changed their prod-
sitions for the foreseeable ucts or advertisements due to COVID-
COVID-19 to hit pet insur- 19. As a result, insurers that can dif-
future ance GWP growth, despite ferentiate themselves and introduce

Just over 60% of SME employers in the creative financial benefits for custom-
UK are concerned about staff con- rise in animal adoption ers will be able to increase their cus-
tracting COVID-19, according to a sur- Growth in the pet insurance market tomer base.”

The Insurance Times, November 2020 21