New analysis from Premium Credit has shown that the Construction sector borrows the most to fund insurance premiums.
The Professional and Scientific sector saw the most growth in terms of using credit for insurance.
The data showed that 54% of SMEs use some form of credit to pay for insurance premiums, borrowing an average of £1,180. Around 15% of them say they have borrowed more than £3,000. Two years ago, the research showed that 51% of SMEs were using credit to pay for insurance premiums and borrowing an average of £1,130.
Construction firms were the most likely to use credit to fund insurance premiums, they accounted for 13.8% of all loans from Premium Credit last year, slightly lower than in 2023, although still 1 percentage point higher than 2022.
The Professional and Scientific sector accounted for the second highest share of loans at 13.3% last year and saw the most growth, with its share slightly higher than in 2023 and 1.2 percentage points up on 2022.
The third highest share was taken by the Manufacturing sector, with the Wholesale and Retail Trade and Land Transport sectors recording the fourth and fifth highest shares.
The data shows 51% of SMEs report that the cost of their business insurance has increased in the past 12 months, with 10% saying it has increased dramatically. Last year 50% said the cost of their insurance had increased, with 12% saying it had increased dramatically.
Jon Howells, Chief Commercial Officer, at Premium Credit said “Credit plays a major role in funding vital insurance premiums across a wide range of sectors as demonstrated by the ongoing growth in loans we have seen. It is particularly valuable in construction which is consistently the biggest sector for lending.”
Top five sectors for share of total lending to buy credit and how that has changed over the past three years:
| TOP SECTORS | SHARE OF TOTAL LENDING LAST YEAR | SHARE OF TOTAL LENDING 2023 | SHARE OF TOTAL LENDING 2022 |
| Construction | 13.8% | 14.3% | 12.8% |
| Professional and Scientific | 13.3% | 12.5% | 12.1% |
| Manufacturing | 9.9% | 10.4% | 10.2% |
| Wholesale and Retail Trade | 8.0% | 8.8% | 7.1% |
| Land Transport | 7.9% | 8.1% | 8.1% |