1 in 5 SMEs cuts insurance cover amid cost-of-living crisis
Authored by Allianz
Small businesses identify inflation as biggest threat for 2023 in Allianz survey
Allianz research has found that 19% of small and medium businesses have reduced their insurance cover in the past 12 months and a similar proportion plan on doing the same in the coming year, amid rising cost pressures.
Helen Bryant, director of digital trading at Allianz Commercial, comments:
“This raises the risk of underinsurance and we’ll continue to work with our broker partners to ensure that our customers have the right level of protection, especially in these turbulent times.”
The 500 small and medium-sized entreprises (SMEs) surveyed by OnePoll said their biggest day-to-day challenges had to do with energy bills (53%), supply chain problems (35%) and late payments or unpaid invoices (30%).
They listed inflation and the cost-of-living crisis as their top threat for 2023 (64%), followed by the state of the UK economy in general (33%) and the impact of Brexit (25%).
Overall, 71% of respondents said the cost-of-living crisis is having a negative impact on their business. SMEs say they need energy support (49%), cash flow measures (39%) or tax breaks (39%). In the last 12 months, 46% of them have changed the way they operate in order to save energy.
Over the same period, 26% of SMEs increased the number of products or services they offer. However, 60% kept their insurance cover unchanged, while 21% increased it and 19% reduced it. The proportions are the same regarding their plans for the next 12 months.
Helen Byrant adds:
“SMEs are having to be increasingly agile and adapt their business models or modify their operations. These agile entrepreneurs need to let their insurance provider know when they've made significant changes as this could lead to gaps in cover. In this regard, brokers play a crucial role: their expertise will help businesses have the right protection for their changing needs. In this way, the insurance industry can really support business diversification.”
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