Sir Keir Starmer announced he was resigning as UK prime minister on 22 June, 2026, which will lead to a new government being formed, potentially as soon as July. This will have an impact on the overall economy, including the insurance industry. The new prime minister seems likely to be Andy Burnham, but that is not yet confirmed—and little is known about any changes he will make that could impact insurance. However, uncertainty is always a concern for SMEs in the UK, which could trouble commercial insurers in the short term.
GlobalData 2025 UK SME Insurance Survey
GlobalData’s 2025 UK SME Insurance Survey found that the impact of a new government ranked highly in terms of how they viewed concerns. It found that 59% of SMEs were either “somewhat concerned” (33%) or “very concerned” (26%) about the impact of a new government. SMEs make up 99.9% of UK businesses in terms of volume so are especially important to the economy and thus the overall commercial insurance sector.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Uncertainty and rises in inflation or interest rates directly lead to more business closures as many SMEs face tight margins. Insurers could see contracts reduce in the short term due to vulnerable SMEs closing if there is a shock to the overall economy.
This trend is not specific to party politics and individual politicians, but it does highlight that a new leader, likely a new chancellor, and potentially new financial policies create uncertainty. This makes future planning harder, as there could be changes around taxes, regulation, and other areas set by central government. A new government going in a dramatically different direction could also lead to spikes in inflation or interest rates, as we have seen in the past with Liz Truss.
A month of uncertainty ahead
This next month of uncertainty—including speculation around who the new prime minister will be and what changes they are intending to make—could be a stressful time for many SMEs. A political party changing leader just two years into government suggests their policies have been unpopular, meaning the new leader and government may look for a significant change of direction. They are likely to want to clearly differentiate themselves from the previous government, even though both are from the same political party.
Therefore, we are likely to see immediate changes across the board from the new government, which UK SMEs will be monitoring very closely. SME insurers and brokers must ensure policy wordings are as clear as possible to help reduce confusion. They should also explore flexible coverage options, which can help ease pressure or increase limits in times of stress.
Ben Carey-Evans is a senior insurance analyst at GlobalData
