Rising insurance premiums also influenced 9% of respondents to reduce the level of cover on their policy
New research has found the 42% of SME businesses saw increased insurance premiums in 2022 as the cost of living crisis continues to rage.
Premium finance company Premium Credit’s Insurance Index, which monitors insurance buying and how it is financed, also today (14 December 2022) revealed that 7% of SMEs had reported dramatic increases to their premiums.
Additionally, the research found that these increases in premiums had led one in six (17%) of surveyed SMEs to make cuts to their business, while a further 11% had cut back on investment in the last two years.
Data from the latest Insurance Index was gathered by surveying 681 SME owners and managers during September 2022.
Increases in insurance premiums meant that 10% of SME had increased the excess on their cover, while another 9% had reduced the level of cover they had.
Nearly one in four (24%) of those surveyed businsses said they had borrowed more in the past year to pay for insurance – an increase on the 21% who said they had during the last survey, which was conducted in March this year.
Using credit helps firms spread the cost of insurance over a designated time period to ease the financial burden of having to pay it in one lump sum.
Based in the UK, Premium Credit is a premium finance provider for both commercial and retail insurance products, it offers financing for the payment of insurance premiums.
Financial shocks
Owen Thomas, chief sales officer at Premium Credit, said: ”Businesses are facing a series of financial shocks with increasing insurance premiums adding to the pressure from rising energy bills and worries about an economic slowdown.
Read: 59% of SMEs rely on credit to pay for insurance – Premium Credit
Read: Reliance on credit to buy insurance rises as price pressures squeeze – Premium Credit
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“Credit continues to play an important role in ensuring all businesses can continue to afford insurance, which is often vital to the continuing success of their businesses.”
The premium finance firm’s research additionally showed that vehicle insurance was the most common insurance SMEs paid for using credit – overall, 36% of surveyed businesses used credit to pay for their cover.
Just behind vehicle insurance was property insurance, which 33% of respondents reported using credit to pay for.
Towerbrook announced that it would acquire Premium Credit back in Spring (3 May 2022).
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