Nearly 50% of UK SMEs are worried about the availability of insurance for their business, according to new research by Norwich Union.
Nearly 50% of UK SMEs are worried about the availability of insurance for their business, according to new research by Norwich Union.
The survey, conducted by Holden Pearmain Research, amongst 500 SMEs showed that 45% consider the price and availability of commercial insurance to be a considerable risk to their business. But expectations for year on year premium increases were limited – only 40% expected insurance premiums to go up every year, even if the SME increased its own prices.
Business owners were not prepared to cut corners on cover, however. The "Understanding Businesses" survey revealed that 66% were not prepared to lose benefit or have a higher excess to secure a cheaper premium. And only 15% admitted to buying the cheapest commercial insurance they could find.
74% agreed that insurance was an essential part of a successful business – only 15% confessed that if insurance wasn’t a legal requirement, they wouldn’t bother to insure. And only 12% are worried that they are under-insured.
Despite an increasingly competitive marketplace, 85% of SMEs were optimistic about the future of their business. More than half (54%) were not worrying about the effect of crime on business, and 55% were confident that their businesses would expand in the next 12 months.
However, 80% predicted that the challenges facing their business were likely to increase over the next 12 months. Amongst the issues most worrying SMEs, complying with government regulations was a concern for 47%, with 72% of the opinion that changes in legislation create more problems than solutions for SMEs.
40% lost sleep over poor cash flow and 37% over complying with employment law. Litigious Britain is also a concern, with nearly a quarter of all those surveyed (22%) confessing to being worried about potential legal action from an employee.
When it comes to relationships, nothing beats the human touch. 77% prefer to deal with the same person in their business relationships and while the internet continues to play an increased role in the development of business relationships, 70% still like to meet their suppliers face to face.
While 69% think that professional advice is expensive for SMEs, half of those surveyed also thought that their need for advice would increase over the coming years with legal issues, financial advice, employment issues, health and safety and taxation proving the top five areas where more advice is most needed.
Debbie Heaney, head of knowledge and customer development at Norwich Union commented: "Keeping up with the raft of new legislation can be extremely onerous for an SME. For insurers and particularly brokers, this can provide a key opportunity to position themselves as risk advisors as well as salespeople. By providing the latest updates on legal and health and safety issues, we can really add value as an industry. The recent launch of the segmented commercial product range from Norwich Union aims to help meet these challenges, with access to the Norwich Union risk helpline and the Hardfacts publications incorporated into the product offerings."
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For further information, please contact:
Debbie Wells at Staniforth on 0161 274 0100 or
David Ross at Norwich Union on 08703 66 68 65/07786 526350.
Notes to editors
- The survey was conducted with 500 UK SMEs by Holden Pearmain
- Norwich Union is the UK's largest insurer with a market share of around 14%
- With a focus on insurance for individuals and small businesses, Norwich Union insures:
- one in five households
- one in seven motor vehicles
- more than 800,000 businesses
- Norwich Union products are available through a variety of distribution channels including brokers, corporate partners such as banks and building societies and Norwich Union Direct
- Norwich Union’s news releases and a selection of images are available on the Aviva internet press centre at www.aviva.com/media
- An ISDN facility is available for studio quality broadcast. Call the press office on 08703 66 68 68
- For all life & pensions media enquiries 08703 66 68 73
- For all other media enquiries 08703 66 68 68