UK businesses fear the impact of a new prime minister amid concerns over their policies and priorities.

It is widely expected that new Labour MP and former Mayor of Manchester Andy Burnham will takeover from Sir Keir Starmer as UK prime minister and in doing so will introduce a wave of political ambiguity that could destabilise commercial insurers.

Intelligence and productivity platform  GlobalData explained little is known about any changes Burnham will make that could impact insurance at this point. However, uncertainty is always a concern for SMEs in the UK, which could trouble commercial insurers in the short-term.

The concerns come as GlobalData released its 2025 UK SME Insurance Survey which found that the impact of a new government ranked highly in terms of how they viewed concerns. It added that 59% of SMEs were either “somewhat concerned” (33%) or “very concerned” (26%) about the impact of a new government.

Ben Carey-Evans, senior insurance analyst at GlobalData, said: “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. 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, the survey added.

Carey-Evans explained: “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 will 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,” GlobalData said.

Carey-Evans concluded: “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.”