CREATING IN UNCERTAIN TIMES CERTAINTY

The SME community is integral to Australia. The challenges keep on coming, and brokers have an increasingly important role to play.

By MARTIN WANLESS

For SMEs across the world, the past few years have been anything but predictable. A pandemic, global politics and the war in Ukraine have affected businesses across the world, while here in Australia, weather events have merely compounded an already difficult situation.

“There’s a whole heap of things going on that are outside of the control of businesses,” says Anthony Pagano, Head of Distribution at Vero.

“You’ve got the cost of inflation, labour shortages, material impacts, and interest rate rises, and those current economic conditions are the biggest concern for business right now.”

That thought is backed by insights from Vero’s 2023 SME Insurance Index Report, which found 61 per cent of businesses held economic concerns, with inflation and supply costs featuring at the top of their list.

Matthew Millener, Head of SME and Dealer Commercial at Allianz, says the economic situation is having a direct impact. “The increasingly challenging economic environment creates its own problems. Australia is facing record levels of inflation due to disrupted supply chains, the surge in energy prices, the severe weather events and the ongoing impacts of the COVID-19 pandemic.

“We are seeing drops in business and consumer confidence following recent interest rate increases, and this puts businesses under pressure to save money.”

Changing Dynamics Of The Sme World

Of course, the many external challenges facing businesses have had a direct impact on what they do and how they do it – something that’s got to be taken into account at renewal time.

Damien Gallagher, Executive Manager at CGU, says, “It’s vital that SME clients ensure their policy reflects their current business and trading conditions.

“There have been a lot of changes in the past few years due to the pandemic, so it’s important that business owners are having upfront conversations with their brokers about how their operations might have changed and whether their current policy coverage is appropriate. This includes their approach to stock levels, new equipment and machinery, staffing, as well as flexible working arrangements and business continuity plans.”