Vero research reveals small businesses are confident about natural disaster resilience
Natural disasters rank well down the list of concerns highlighted by Kiwi SMEs, according to Vero’s most recent SME Insurance Index.
SME Business Concerns
Chris Brophy, Executive Manager Business Insurance at Vero, says one reason natural disasters might be less of a concern than other risks is that SMEs are confident they are insured against them.
“Given New Zealand’s experience over the past 10 years, it would be surprising if SMEs believed natural disaster damage wasn’t a possibility for them,” says Brophy. “But only 16% are concerned or very concerned about the potential impact of a disaster on their business.
Photo: Chris Brophy
The survey reveals 47% of SMEs are confident their business is covered for natural disaster. SMEs who’ve insured through a broker and feel satisfied with the support and advice they’re getting are even more likely to be confident (67%), compared to 39% for those who bought all of their insurance directly.
“The research suggests SMEs are gaining confidence from working with their broker, which is likely because they’ve had more in-depth conversations about their risk profile and their cover, and may have a better understanding of what their insurance will do for them if they’re affected by a natural disaster.”
Of those who are confident about their natural disaster cover, 84% say their broker has provided a risk assessment and recommended the most appropriate insurance, and 60% say their broker has recommended other changes they could make to minimise their risk.
The research also shows SMEs in the Wairarapa/Wellington region are the least worried about natural disaster risk, with 12% concerned compared with the survey average of 16%.
Brophy says this finding is surprising given the potentially higher risk of earthquake and other disasters in this region.
“This may be as a result of education and preparedness. Our results show those in Canterbury are most likely to feel confident about their natural disaster cover (68%), with 42% of Wellingtonians surveyed feeling confident.
“Aucklanders are the least confident, with only a third confident they are adequately insured against natural disaster risk. Perhaps the lower risk of certain disasters in that region means they are less likely to have engaged with their insurance cover and are more likely to be unsure of how well they’re covered.”
Similarly, industries that might be hardest hit by a natural disaster are most concerned about it, including accommodation and food services (39%) and agriculture and farming (32%). However, those industries are also the most confident that they are covered (62% and 66% confident respectively).
Vero’s customer data shows 97% of SMEs on its books have natural disaster cover as part of their policy. Brophy says there are a variety of reasons the remaining 3% might not have cover, for example natural disaster not being relevant to what they have insured.
Vero has recently added information on ways SMEs can minimise property damage caused by a natural disaster to its Risk Profiler tool, which provides industry-specific data on risks and how to reduce them.
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The information in this article has been compiled from various sources and is intended to be factual information only. Full details of policy terms and conditions are available from Vero Insurance New Zealand Limited or your financial adviser. For advice on product suitability, please contact your financial adviser. While we take reasonable steps to ensure that the information contained in this article is accurate and up-to-date, it is subject to change without notice. Vero Insurance New Zealand and its related companies does/do not accept any responsibility or liability in connection with your use of or reliance on this article.