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The global SME insurance market was valued at USD 28 billion in 2023 and grew at a CAGR of 5% from 2024 to 2033. The market is expected to reach USD 45.60 billion by 2033. The rapid growth and expansion of MSMEs will drive the growth of the global SME insurance market.
SME insurance is abbreviated form of Small and Medium Enterprises insurance. SME insurance is designed for small and medium business enterprises to protect them against myriads of risks and threats. The risks and threats can lead to potential financial, property and life loss. Small and medium enterprises are disproportionately impacted given the low levels of reserve capital or cushioning they have unlike large enterprises with big pockets. SME insurance can be customized to cover all the aspects specific to a particular business. property insurance, liability insurance, and professional indemnity insurance are a few common and known examples of SME insurance. Property insurance is meant for physical assets of the company, including the buildings, machines, equipment, raw materials and other inventories. The evolving nature of risks and threats have led to the introduction of new categories of insurance like cyber insurance. SME insurance allows businesses to safeguard their assets by transferring the potential loss from perceived threats over to third parties against a premium. It ensures smooth and uninterrupted operations, business stability and prudent risk management. SME insurance is also a legal obligation and compliance requirement in most economies, making it a highly valuable and demanded product globally.
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The rapid growth expansion of MSMEs – MSMEs or micro, small and medium enterprises are backbones of national economies. they are the most dominant employers and contribute significantly towards employment and income generation for individuals as well as the national GDP and income. They promote entrepreneurship, women empowerment, domestic goods. They also protect craftsmanship and advocate inclusivity. They drive innovation, collaboration, growth and development for everyone. Governments, private and global institutions have all recognized the value of MSMEs for national and global economy, encouraging them to prioritize the growth and expansion of MSMEs through regulatory support, incentives, subsidies, funding and policy changes. these changes are accompanied by guidelines directed towards protecting MSMEs from various risks and threats through insurance. Awareness amongst the stakeholders about need, importance and benefits of insurance also facilitate a greater adoption of SME insurance. SME insurance is by MSMEs given the comprehensive, holistic and customizable nature of the products. SME insurance is designed after assessing the natures, needs and requirements of MSMEs, thereby making it the preferred choices. therefore, the rapid growth and expansion of the MSMEs will drive the global SME insurance market.
Complexity and cost concerns – small and medium enterprises do not have big budgets and extensive capital unlike large enterprises. Small budgets lead to difficult financial decisions and limited choices. the evolving nature of threats and risks have increased the complexity of calculating the potential damage they carry. The unique and subjective nature of products, services and operations of small and medium enterprises adds to the complexity in assessing values. The compliance regulations further add a layer of complexity which alienates enterprises. The lack of awareness about SME insurance and knowledge about insurance components, deliverables, and compliance guidelines also limit the market’s growth. therefore, the complexity and cost concerns associated with SME insurance will hamper the market’s growth.
Stringent regulatory guidelines – the increasing incidence of cyberattacks, natural disasters, global health, economic uncertainties and geopolitical volatility have increased the risk of financial loss, property loss, operational restrictions and abrupt closure of businesses activities. This leads to significant loss to individual businesses as well as the overall national economy. Small and medium enterprises are disproportionately impacted given the lack of savings, funds or cushioning they have to weather these uncertainties and closures unlike large enterprises. Governments, industry participants and other stakeholders understand the need to protect businesses against these risks. Therefore, governments worldwide have introduction legislations making it mandatory for businesses to acquire insurance for various critical aspects of their businesses. governments have also set up relevant authorities to ensure implementation and accountability on the part of businesses. these initiatives will propel the global SME insurance market’s growth.
The regions analysed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. North America emerged as the most significant global SME insurance market, with a 38% market revenue share in 2023.
the population in the region is well aware about insurance and compliance regulations including small and medium enterprises, contributing positively towards the regional growth of SME insurance market in North America. Additionally, the regional insurance market is well-established with presence of significant market players offering wide variety of insurance services. the automation in the insurance industry has contributed to more efficient and seamless insurance services in the region. favourable regulatory environment with economic stability also contribute to the market’s growth.
North America Region SME Insurance Market Share in 2023 - 38%
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The product type segment is divided into property insurance, liability insurance, business interruption insurance, cyber insurance, commercial auto insurance and others. The property insurance segment dominated the market, with a market share of around 37% in 2023. Property insurance insurers property or physical assets like buildings, machinery, equipment and inventory among other things against damage of any kind. The damage could be theft, fire, natural disasters like earthquake or flooding, and vandalism or industrial accidents. Physical assets are capital-intensive assets and uninsured assets can lead to heavy financial losses. Insuring property assets ensures risk mitigation. Physical assets are fundamental to the business operations and therefore the property insurance is vital for businesses. businesses are legally obligated to buy property insurance, which also contributes to the segment’s dominance.
The company size segment is divided into micro enterprises, small enterprises, and medium-sized enterprises. The medium-sized enterprises segment dominated the market, with a market share of around 47% in 2023. Medium-sized enterprises can be defined as business that employ 50-250 employees. They dominate the segment given the higher value of assets in medium-sized enterprises. Furthermore, they are more organized and regulated, making it mandatory under regulatory and compliance guidelines to get assets, employees and business operation insured against risks. The wider scale of operations of medium-sized enterprises exposing it to more risks and thereby necessitate insurance coverage. Furthermore, medium0szied enterprises have relatively higher budget which also augments the adoption of insurance in medium-sized enterprises.
The industry vertical segment is divided into retail, manufacturing, hospitality, healthcare, construction, and others. The retail segment dominated the market, with a market share of around 35% in 2023. Retail segment has several assets including physical stores, machines, devices, equipment, inventory amongst other things which increases the risk and exposure to of the sector, necessitating the need for insurance coverage. The retail segment is dynamic and deals with relatively more traffic in the form of customers, vendors, regular shipments of fresh produce and other FMCG products, consumer durables etc., all of which increases the risk and exposure to damage. furthermore, the retail segment is governed by stringent regulation making it mandatory under compliance laws to have insurance. Insurance reduces risks, ensures business continuity, and reduces financial loss.
Report Description:
| Attribute | Description |
|---|---|
| Market Size | Revenue (USD Billion) |
| Market size value in 2023 | USD 28 Billion |
| Market size value in 2033 | USD 45.60 Billion |
| CAGR (2024 to 2033) | 5% |
| Historical data | 2020-2022 |
| Base Year | 2023 |
| Forecast | 2024-2033 |
| Region | The regions analysed for the market are Asia Pacific, Europe, South America, North America, and Middle East and Africa. Furthermore, the regions are further analysed at the country level. |
| Segments | Product Type, Company Size and Industry Vertical |
As per The Brainy Insights, the size of the global SME insurance market was valued at USD 28 billion in 2023 to USD 45.60 billion by 2033.
Global SME insurance market is growing at a CAGR of 5% during the forecast period 2024-2033.
The market's growth will be influenced by the rapid growth expansion of MSMEs.
Complexity and cost concerns could hamper the market growth.
This study forecasts revenue at global, regional, and country levels from 2020 to 2033. The Brainy Insights has segmented the global SME insurance market based on below mentioned segments:
Global SME Insurance Market by Product Type:
Global SME Insurance Market by Company Size:
Global SME Insurance Market by Industry Vertical:
Global SME Insurance Market by Region:
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