Why broker advice matters in tackling SME underinsurance
By Simon and Mark, Regional Underwriting Managers
A digital market still needs advice
The UK SME insurance market is becoming increasingly digital and price-led. GlobalData research suggests 60% of SMEs now purchase insurance online, while price is the leading purchase driver, cited by 59% of SMEs.
But digital buying does not remove the need for advice. 42% of SMEs still consult a broker before buying insurance, showing that many businesses continue to value expert support when making risk and cover decisions.
Underinsurance remains a major risk
Underinsurance remains a significant challenge. It is estimated that up to 80% of UK SMEs may be underinsured, yet only one in six are “very concerned” about the issue. Rebuild Cost Assessment data also shows around 70% of UK buildings are underinsured, often covered for only around two-thirds of their true rebuild cost.
The broker role is essential
Underinsurance is often caused by outdated valuations, rising rebuild and replacement costs, changing risks, or limited understanding of policy wording. Insurance Business has reported that 40% of businesses cite lack of understanding as a key cause.
This is where brokers add value: helping SMEs assess exposures, keep sums insured up to date, understand policy terms and balance affordability with resilience.
Conclusion
Digital adoption isn't going away, and nor should it. But it doesn't change the fact that underinsurance is still far too common. Brokers have a real part to play here, helping SMEs actually look at their cover rather than just renew it on autopilot.
Mark and Simon, both work in Covéa's Commercial Lines Regions team. Between them they bring more than 75 years of underwriting experience, and they see this play out first-hand. Rebuild costs go up, asset values shift, businesses change how they trade — and cover doesn't always keep pace. That's usually where the gaps creep in.
Neither of them is against digital trading — it's quicker, easier, and fine for straightforward risks. But cheapest isn't always safest, and a good broker conversation can catch things a quick online quote won't: is the sum insured still right? Do the limits still make sense for the business as it is today, not as it was three years ago?
Covéa only trades through brokers, so backing them with solid underwriting support is simply part of the job. Mark and Simon's take is straightforward: let digital handle the easy stuff, and lean on broker and underwriter expertise when things get more complicated — because that's usually where underinsurance starts to bite.
