New Zealand SMEs may not be appropriately insured, as most that have made changes to their business because of covid have not talked it through with their broker, according to an annual Vero SME Insurance Index survey.
Preliminary survey findings released today show 79% have made business changes and 10% adjusted their insurance policy, but only 23% held discussions with their broker.
Changes made to keep the business running during the pandemic include applying for government assistance, dipping into savings, reducing staff hours and cutting costs.
Vero says communication is key, pointing out most broker-advised SMEs are missing out on the expertise and guidance of their risk adviser at this important time, given the financial toll of the pandemic on their business.
About 39% say their revenues fell by 25% or more as of December last year and 22% put the decline at 1-24%. Only 15% experienced increased revenue and 24% reported no changes.
The Suncorp-owned insurer urges brokers to reach out to clients to provide the advice they need, saying it is a chance for them to demonstrate the value-add they offer as some of the changes made by SMEs may remain even after the pandemic is over.
Half of the 638 SMEs surveyed expect to keep at least some of the changes, 26% say they will retain all and 24% aim to revert back to “normal” as soon as possible.
“These research findings suggest there is an opportunity for brokers, if they haven’t already, to check-in with SMEs to understand if their SME customers have had to make changes to their business due to Covid-19 which may affect their insurance cover,” Executive Manager Business Chris Brophy told insuranceNEWS.com.au.
“This may also provide an opportunity for brokers to provide value through their expertise and give SMEs the confidence that they are adequately insured for their specific needs.”
He says the past few years have been challenging for SMEs, which means “insurance may not have been top of mind as they’ve been busy adjusting and pivoting their business due to Covid-19”.
The survey found 15% of SMEs have increased their cover but 20% have done the opposite and 19% reduced the number of things covered.
Vero says more findings from the New Zealand Insurance SME Index will be released in the coming weeks.
The findings released today specifically relate to the impact of Covid-19 on the SME sector.
In other key trends, the survey found SMEs are most concerned about the long-term economic impact of covid and also prospects of a downturn.
SMEs are also worried about supply chain disruption, mental health, regulatory/legislative changes and workplace accident/safety.
Click here for the Vero infographic.