Small and medium enterprises (SMEs) in Singapore are navigating a landscape fraught with various risks, yet a significant gap in insurance coverage persists. Despite moderate to high levels of concern regarding potential business interruptions, a mere 22% of SMEs have policies in place to mitigate such risks, according to a recent survey conducted by QBE Insurance.
Ronak Shah, CEO of QBE Singapore, underscored the complexity of today’s risk landscape and the pressing need for insurers to offer tailored solutions to address the unique needs of SMEs. He emphasised the demand for a seamless, user-friendly insurance experience that encompasses online claim and settlement processes, coupled with personalised consultation and rapid agent responses.
Key challenges identified by SME respondents include escalating costs, reduced profitability, sales growth constraints, and intensified competition. Despite these hurdles, SMEs reported fewer business issues in 2023 compared to previous years, with cyberattacks emerging as the most common incident, followed by loss of income due to business interruption and liability issues.
A notable trend is the growing preference for tailored insurance packages covering multiple risks, with 76% of respondents expressing a desire for omnichannel sales experiences. While offline purchases remain dominant, online channels are gaining traction due to their convenience and comparative advantages.
Looking ahead, SMEs remain wary of economic conditions such as potential GST increases and rising operating costs. However, many are optimistic about improved economic outlooks for 2024 and are planning investments in staff training, capital, and insurance coverage.
In conclusion, the findings underscore the imperative for SMEs to prioritise comprehensive insurance coverage to safeguard against unforeseen risks and ensure business resilience in an increasingly volatile environment. As SMEs continue to navigate uncertainties, proactive risk management and strategic insurance planning are indispensable for sustainable growth and long-term success.
