S’pore SMEs fear business interruption but don’t own insurance for it

S’porean SMEs said cyberattacks were the most common incidents in 2023.

Small and medium enterprises (SME) in Singapore have expressed moderate to high levels of concern for various risks, there's a notable gap in insurance coverage. For example, whilst 77% are concerned about business interruption, only 22% have policies for it, a QBE Insurance survey showed.

“With three-quarters of SMEs needing a tailored package to meet their insurance requirements, this outlines the complexity of today’s risk landscape, as well as the need for insurers to provide a suite of bespoke solutions for each and every customer. We know that customers are seeking a simple and easy-to-purchase experience that includes both online claim and settlement processes, as well as consultation and quick responses from their agents.” said Ronak Shah, CEO of QBE Singapore, in a press release.

Top challenges identified by SME respondents include increasing costs and reduced profitability (50%), sales growth and reduced customer spending (40%), as well as increasing competition, staff acquisition, and cash flow and funding access issues (39%, 37%, and 36% respectively).

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Despite these concerns, many SMEs experienced fewer business issues in 2023 compared to previous years. Cyberattacks were the most common incident (24%), followed by loss of income due to business interruption (19%) and liability issues (17%).

About 76% of respondents prefer tailored insurance packages covering multiple risks and desire an omnichannel sales experience. Whilst offline purchases remain predominant (66%), online channels are gaining traction due to convenience and comparison benefits.

Looking ahead, SMEs express concerns about economic conditions such as GST increases and rising operating costs. However, many anticipate improved economic outlooks (60% for 2024) and plan to invest in staff training (52%), capital (48%), and insurance coverage (48%).

In its annual survey of Singaporean SMEs, QBE Insurance gathered insights from 605 business leaders between December 2023 and January 2024.