Business confidence is under strain, with nearly two-thirds of small- and medium-sized enterprises (SMEs) reporting a drop in revenue over the past year, and income was down a quarter for a further 17%.
Insurer Vero’s annual SME Insurance Index shows that 21% of businesses lack confidence in their own operations, with just 36% feeling assured in their prospects.
Vero executive general manager Sacha Cowlrick pointed to cost pressures but stressed that businesses must maintain adequate insurance.
“Having adequate [insurance] cover could be the difference between folding under pressure and finding a way through.”
The survey revealed that most of the pressures businesses face come from outside their control, including rising costs (88%) and the broader economic downturn (83%).
Political interference remains a serious concern. Changes to tax policy (69%), regulatory red tape (61%), and political instability (61%) top the list.
“This is compounded by the current volatile global landscape, adding another layer of unpredictability to an already complex operating environment for SMEs,” Cowlrick said.
“There is no doubt that there are very real macro-pressures concerning SMEs, but it’s critical that business owners focus on the things they can control in order to give them the best chance of weathering the storm.”
47% of businesses reported they rarely or never conduct formal risk analyses, and 53% operate without structured risk management. Yet six in 10 expect to face at least one major operational risk this year.
Meanwhile, 24% believe their business is very resilient.
“Business resilience isn’t just about bouncing back after an event,” Cowlrick explained. “It’s about understanding your exposures and making informed decisions before something happens.”