Blog: a new lens to evaluate SME risk and support business resilience

In an increasingly volatile market, insurers are seeking smarter ways to assess SME risk and strengthen resilience. Crif’s Sara Costantini explores how ESG data offers a powerful new lens to evaluate risk, drive sustainability and enhance profitability.

In an increasingly volatile world, the resilience of small and medium-sized enterprises (SMEs) is under the spotlight. 

As SME insurers look to build more robust, future-proof portfolios, environmental, social and governance (ESG) data can be used as a strategic tool to better assess risk, promote sustainability and foster long-term profitability; yet currently its full potential remains largely untapped.

Recent research conducted by Insurance Post survey in conjunction with Crif, highlights a disconnect between the recognised importance of ESG and its practical application. 

Despite widespread awareness of its relevance, ESG compliance was ranked as a key SME resilience factor by only 17.1% of insurers, lagging far behind financial metrics such as creditworthiness and claims history.

Is this a strategic misstep? Global trends and public attitudes are placing increasing emphasis on responsible business practices, and the integration of ESG data into SME underwriting could help insurers more accurately assess risk, protect clients’ assets, and strengthen long-term resilience.

A hidden vulnerability

A clear blind spot in SME risk assessment today lies within supply chains.

Only 30.3% of insurers currently consider supply-chain continuity as a top-five risk factor. Yet, when asked which ESG-related element was most critical to SME resilience, 53.4% of insurers selected an ethical supply chain. 

From environmental non-compliance to human rights violations, the risks embedded in SME supply chains are often opaque but highly material. For insurers, the inability to quantify this risk represents a vulnerability in current underwriting models.

The good news is there are tools available to address this gap by enabling insurers to access comprehensive ESG data and scoring across an SME’s supply network, offering greater transparency and actionable insights to better protect both insured businesses and insurer portfolios.

Aligning ESG with profitability

SME financial resilience can be linked with strong ESG credentials. Crif’s ESG Global Observatory 2025 study revealed that ESG-certified SMEs show 50% lower commercial risk compared to their non-certified peers. In addition, certified businesses exhibit significantly better payment behaviours, with 41% fewer days of average payment delay.  These are clear indicators of organisations that make more stable, reliable policyholders.

Despite this, the Insurance Post survey, carried out in conjunction with Crif, found that only 12.3% of insurers consistently integrate ESG data into their underwriting decisions, while just 4.3% currently offer premium incentives for ESG-compliant SMEs.

By embedding ESG scoring into pricing models and offering incentives for ESG improvements, insurers can not only reduce claims risk but also actively support their clients in becoming more resilient and sustainable.

This represents a major opportunity. By embedding ESG scoring into pricing models and offering incentives for ESG improvements, insurers can not only reduce claims risk but also actively support their clients in becoming more resilient and sustainable.

ESG expectations are rising

Crif’s 2025 Banking on Banks report underscores how consumer expectations are evolving towards financial services, and particularly among younger demographics.

According to the study:

• 32% of UK consumers believe banks and insurers must do more to protect the environment, a figure that rises to 49% among those aged 18–34;
• 64% of 18–34s are more likely to use a financial provider that is ethical and transparent;
• 56% consider diversity, equity and inclusion (DEI) an important factor when choosing providers;
• 41% worry financial providers may backtrack on DEI due to changing global political climates.

This highlights the reputational risk and opportunity for insurers. Aligning with and promoting ESG principles is not purely about compliance or internal governance; increasingly it is a brand differentiator.

For SME insurers, this is a chance to lead by example. By educating clients on ESG, providing access to ESG certification tools and aligning incentives with best practices, insurers can strengthen client relationships and improve both social impact and profitability.

Competitive advantage

One of the key barriers to ESG adoption is the fragmented nature of ESG data and standards. The Insurance Post survey, in conjunction with Crif, found that 33.3% of insurers rely on internal ESG assessments, 28.2% use self-assessment questionnaires and over 53% would be more likely to integrate ESG data if public data was more reliable.

These inconsistencies slow down underwriting, frustrate brokers and hinder adoption. Today, solutions are available which offer automated questionnaires, third-party data integration and certified scoring frameworks, providing a consistent, scalable approach that can be shared across brokers, MGAs and underwriters.

This streamlining of ESG evaluation not only supports better decision-making but also ensures SMEs are assessed fairly, enabling more informed, competitive pricing and clearer incentives for sustainability.

The time to act is now

As the insurance landscape evolves, ESG data provides a new lens to evaluate SME risk, one that goes beyond financial metrics and taps into business behaviours that signal long-term resilience.

Those insurers that move first, integrating ESG data and scoring systems and promoting responsible supply chains, while educating and incentivising SMEs with tailored products, will become known and sought out as strategic resilience partners. They will be ideally positioned to grow market share, build stronger portfolios and enjoy long-term client trust.  

The window for early adoption advantage is wide open. 

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