Construction sector borrows the most to finance insurance

New analysis from Premium Credit has found that the construction sector borrows the most to fund insurance, but the fastest growing sector is the wholesale and retail sector.

The Premium Credit Insurance Index, which tracks insurance purchases and how they are financed, shows that 55% of SMEs are currently using some form of credit to pay for their insurance, borrowing an average of £1,080. Some 15% of these say they have borrowed more than £3,000.

Construction companies were the most likely to use the loan – they accounted for 14.3% of all net advances from Premium Credit last year. This was 1.5% more than in 2022 and 1.9% more than in 2021.

The professional and scientific sector accounted for the second largest share of net revenues at 12.5% ​​last year, followed by manufacturing at 10.4%, wholesale and retail trade at 8.8%, and land transport at 8.1%.

However, it is the wholesale and retail sector that is seeing the greatest growth – its share in net revenues at 8.8% is 1.7% higher than in 2022 and 3.4% higher than in 2021.

The index’s research shows that around 50% of SMEs say their business insurance costs have risen in the past 12 months, with 12% reporting dramatic increases. Around 17% of surveyed businesses say they have reduced other costs in their business as a result of rising insurance premiums over the past two years.

Jon Howells, Chief Commercial Officer at Premium Credit, said: “Insurance is essential to business activity across a wide range of sectors, as evidenced by the strong net progress growth we have seen year on year. This is particularly important in the construction sector, which remains the largest lending sector.”

The five largest sectors by share of total loans to purchase credit and how this has changed.