Article date: 22 April 2004
Nearly 50% of UK SMEs are worried about the availability ofinsurance for their business, according to new research by NorwichUnion.
The survey, conducted by Holden Pearmain Research, amongst 500SMEs showed that 45% consider the price and availability ofcommercial 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 securea cheaper premium. And only 15% admitted to buying the cheapestcommercial insurance they could find.
74% agreed that insurance was an essential part of a successfulbusiness – only 15% confessed that if insurance wasn’ta legal requirement, they wouldn’t bother to insure. And only12% are worried that they are under-insured.
Despite an increasingly competitive marketplace, 85% of SMEswere optimistic about the future of their business. More than half(54%) were not worrying about the effect of crime on business, and55% were confident that their businesses would expand in the next12 months.
However, 80% predicted that the challenges facing their businesswere likely to increase over the next 12 months. Amongst the issuesmost worrying SMEs, complying with government regulations was aconcern for 47%, with 72% of the opinion that changes inlegislation create more problems than solutions for SMEs.
40% lost sleep over poor cash flow and 37% over complying withemployment law. Litigious Britain is also a concern, with nearly aquarter of all those surveyed (22%) confessing to being worriedabout 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 businessrelationships and while the internet continues to play an increasedrole in the development of business relationships, 70% still liketo 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 advicewould increase over the coming years with legal issues, financialadvice, employment issues, health and safety and taxation provingthe top five areas where more advice is most needed.
Debbie Heaney, head of knowledge and customer development atNorwich Union commented: "Keeping up with the raft of newlegislation can be extremely onerous for an SME. For insurers andparticularly brokers, this can provide a key opportunity toposition themselves as risk advisors as well as salespeople. Byproviding the latest updates on legal and health and safety issues,we can really add value as an industry. The recent launch of thesegmented commercial product range from Norwich Union aims to helpmeet these challenges, with access to the Norwich Union riskhelpline and the Hardfacts publications incorporated into theproduct offerings."
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 HoldenPearmain
- Norwich Union is the UK's largest insurer with a market shareof around 14%
- With a focus on insurance for individuals and smallbusinesses, 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 ofdistribution channels including brokers, corporate partners suchas banks and building societies and Norwich Union Direct
- Norwich Union’s news releases and a selection of imagesare 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 6873
- For all other media enquiries 08703 66 68 68