We've redefined the business protection gap at £1.1 trillion. This is the first time in four years that any organisation has published an update to Swiss Re’s widely cited research from 2005. View a PDF of the research findings here.
The business protection gap now includes:
- Corporate debt gap of just under £300bn
- Shareholder protection gap of over £400bn
- Key person protection gap of over £400bn
In order to calculate these figures, we conducted research amongst 1000 members of the British Chamber of Commerce in April 2009. The study showed that 45% of business owners say that their business would fold within 12 months of the death or critical illness of a key person. However, only 4% of business owners questioned said they have shareholder protection in place and one in two (48%) do not have any formal agreement to establish what would happen in the event of the death of a business owner.
51% of the businesses surveyed have corporate debt yet just 38% of these businesses have life or critical illness policies in place to cover that money owed.
Clare Harrop, Legal & General’s Head of Specialist Protection said: "It is the responsibility of the protection industry to get in front of corporate clients and make business owners aware of the importance and benefits of key person, shareholder and business loan protection. The market opportunity is there and the support from providers is there, so let’s get on and close that gap.”
Benefits to you
As yet, this business protection gap is largely untapped. So the opportunities for advisers, especially those who speak to businesses now, are huge. The adviser benefits page tells you more.
Benefits for your clients
New work patterns are creating more self employed people and small companies – all more likely to need business protection. Whatever the size of establishment, every senior business person faces a serious responsibility, both financial and personal. Business protection provides peace of mind that if they or another key person were to fall terminally or critically* ill or die, the business could survive. Our product literature has more information.
* If critical illness cover is chosen as an additional option.
