Singapore SMEs unprepared against major business risks: survey

1 in 7 does not have business insurance at all.

Singapore SMEs are underinsured against major business risks, according to a report by global insurer QBE. Majority of SMEs reportedly believe that insurance is a “commodity” product, where a basic level of cover is perceived to be sufficient.

Despite the recognition that insurance aids business operation, over half of SMEs surveyed (53%) admitted that insurance was low on their priority list. Meanwhile, almost six in ten (56%) agreed that minimum coverage was adequate, instead of seeking greater protection of their assets.

More worryingly, the research found that 1 in 7 smaller companies do not have business insurance at all.

QBE also learned that local SMEs do not undertake sufficient research before making insurance purchase decisions.

“64% of smaller SMEs (those that employ 5-20 staff and generate revenue less than $1m) and 51% of larger SMEs (those that employ 21-200 staff and generate revenue $1-100m) admitted that policies provided by different insurers look relatively similar overall while almost two-thirds of all SMEs believe price is the most important concern when choosing insurance products/policies, failing to take into account how more specific offerings best fit their individual needs,” stated the report.

QBE notes that the de-emphasis on risk could have worrying long-term impacts, especially since SMEs employed almost two-thirds of working Singaporeans and delivered 48% of the country’s GDP in 2014.