It is a well known fact that Business Protection is a heavily under-valued insurance in the UK business market.  There are around 4.7 million private sector businesses in the UK, 99.9% of which are SMEs, which AEGON believes represents a potential market of around £500m.

Within the Business Protection market there are different types of insurance needs but a lot of companies don’t actually realise that they have these needs.  The larger insurance companies have now focused their attention on Business Protection and are running adviser workshops up and down the country in an effort to show advisers how their clients could benefit from Business Protection.  One of the main types of Business Protection is Keyman Insurance.  Keyman Insurance is a popular product in America where 25% of companies have Keyman Insurance in place.  In the UK less than 5% of companies have Keyman Insurance in place.  This can only be down to a lack of awareness of the insurance coupled with a lack of adviser understanding of the product.

Business Protection has always been seen by many advisers as a complex product where specialist knowledge of corporate tax is needed.  True, there are some tax issues but many of the insurance companies offer guidance on this.   The main point is that there is a need for Keyman Insurance and tax should not prevent advisers recommending this product to their clients nor should it prevent companies from protecting their key individuals.

The roadshows will help advisers to understand this product range and thus SME’s will benefit from this advice in the coming years.  Business Protection is set to grow as a market and before long it will be part of the business plan rather than an after thought.