While awareness of ESG’s business value is growing, a recent Insurance Post and CRIF survey reveals that many SME insurers still treat ESG as a long-term data goal rather than a near-term operational priority. In today’s volatile risk landscape, marked by climate change, cyber threats, and geopolitical shifts, this cautious approach risks missing a critical opportunity. ESG isn’t just a compliance checkbox; it’s a powerful lens for assessing resilience and future-proofing underwriting models.

We have asked UK insurers, MGAs and brokers which risk factors are most important in evaluating the resilience of SMEs today and in the future, and these are the top 3 factors:

Current Top 3 Emerging Top 3
1 Financial security (76.3%) Cyber risk (86.8%)
2 Claims history (60.5%) Tech infrastructure (52.6%)
3 Cyber risk (52.6%) Financial security (46.1%)

While ESG compliance may not seem a top priority at present, it's gaining momentum; 42.1% have flagged it as an emerging focus for the future.

The CRIF ESG Global Observatory also highlights a compelling trend: SMEs with strong ESG credentials consistently demonstrate greater financial resilience. These businesses tend to have more transparent operations, stronger governance frameworks, and a heightened ability to navigate disruptions, from supply chain shocks to reputational crises. ESG alignment isn’t just ethical, it’s a strategic advantage.

Is ESG compliance a factor in SME risk ratings?

Based on the CRIF-Insurance POST survey, UK insurers, MGAs and brokers are split on how ESG compliance influences their assessments:

Despite growing awareness and proven benefits, ESG compliance is still not a consistent part of current risk models, and its integration into SME underwriting remains limited. Only 47% of insurers currently factor ESG into SME ratings at all and just 12% do so consistently. This gap presents a clear opportunity for forward-thinking providers to gain a competitive edge by embedding ESG data, leveraging business scoring tools, and adopting certification frameworks now available in the market.

How do insurers, MGAs and brokers rate ESG compliance of small and medium-sized enterprises?

They seem to use a range of methods to assess ESG credentials, but the most common are through:

Less frequently used methods include public data analysis, external certification, and other bespoke approaches.

What drives SMEs to embrace sustainability?

We have asked insurers if there are ways or incentives that could encourage SMEs to begin their ESG journey. The top three are:

Percentage Incentives
1 54.3% Promotion of long-term vision: resilience, lower risk, higher profit
2 44.3% Raising the awareness of ESG benefits
3 42.9% Offering policy premium discounts and incentives

ESG and business resilience: Priorities vary across the market

When it comes to ESG factors linked to SME resilience, responses diverge across insurers, MGAs, and brokers.

  • Insurers prioritise ethical supply chain, carbon emissions, and energy consumption
  • MGAs focus on risk management, transparency, ethical supply chain, and customer relations
  • Brokers emphasise health and safety, risk management, and energy consumption

The survey highlighted a gap in supply chains when insurance providers assess SME business continuity. While only 30% of insurers currently rank supply chain resilience among their top five risk factors, 53% identify ethical supply chains as the most critical ESG element for SME resilience. This disconnect highlights a growing, yet under-assessed, exposure within supplier networks, from modern slavery to environmental non-compliance.

The challenge lies in visibility.
Assessing SME supply chains is notoriously difficult without reliable public data. However, robust datasets do exist. Insurers that gain access and integrate this intelligence into their risk models will be better positioned to quantify ESG-linked vulnerabilities and optimise underwriting.

Is ESG compliance used in SME risk ratings?

While insurers are leading with 58% integrating ESG into most or all of their assessments, MGAs are taking a more selective approach, and brokers remain largely disengaged. In fact, 77% of brokers report never factoring ESG into their ratings, highlighting a significant divide in industry adoption.

  • Insurers lead the way, with 58% saying they use ESG compliance always or in most cases.
  • Around 50% of MGAs include ESG in at least some assessments.
  • Brokers are the least likely to factor it in, with 77% saying they never use ESG compliance in their ratings.

ESG integration doesn’t have to be complex or costly. Solutions now exist that offer insurers streamlined ESG questionnaires, access to aggregated third-party and proprietary data, and built-in scoring and certification. These platforms can be shared across brokers, MGAs, and insurers standardising assessments and improving accessibility across the value chain.

Around 38% of insurers say they need clearer evidence linking ESG credentials to insurance risk before committing to full integration. Bridging this gap with data-driven insights will be key to unlocking ESG’s full potential in underwriting.

Embedding ESG for Smarter SME Underwriting

While ESG is increasingly acknowledged as a driver of business resilience, its full potential remains untapped across many insurance functions. By embedding ESG data into pricing, risk assessment, and product design, insurers can make smarter, future-ready decisions. This not only equips brokers with more consistent tools but also strengthens relationships with resilient, transparent SME clients, and ultimately reducing portfolio volatility.

The strategic use of ESG data is no longer a question of if, but when. For insurers ready to move beyond theory, the window for first-mover advantage in the SME commercial lines market is wide open.

Source: CRIF & Insurance Post Business Resilience Survey 2025

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