Helping SMEs face current and emerging risks

Small-to-medium enterprises (SMEs) face a multitude of risks to their business operations. They can help mitigate some of these by seeking expert advice from their broker or insurance partner to better understand their current risk exposure and what cover options may be suitable for them.

A women hanging an Open door sign on a shop front door.

Small businesses form the backbone of the Australian economy. There are currently over 2.3 million (SMEs) with a turnover of up to $10 million operating in this country (PDF, 1.42 MB). When SMEs are performing well, so does the national economy.

However, SMEs are particularly vulnerable to risks that can impact negatively on their day-to-day business operations – and even threaten their viability if not addressed. Businesses currently operate in a high-inflation environment, meaning financial pressures are more critical than in recent years. They’re also now expected to meet greater standards of care for their staff. Under the model WHS laws, businesses must satisfactorily manage the risk of psychosocial hazards in the workplace (last accessed 17 May 2023).

This means:

implementing health and wellbeing initiatives for employees
providing support and recovery in the case of workplace accidents or illnesses
being proactive and supportive in helping employees return to work.

Consequently, SMEs need to:

ensure the appropriate level of insurance cover is in place, particularly when business circumstances change
understand issues associated with being underinsured or uninsured
carry out regular risk assessments and prioritise staff mental wellbeing.

Managing an ‘ecosystem of risk’

Basil Taylor, Head of Allianz Risk Consulting, says the types of risks SMEs are exposed to have changed in the last three years.

“We’re seeing a number of emerging risks that weren’t as significant a few years ago. These include threats posed by climate, supply chain disruptions, as well as the energy crisis,” he says. “These risks can affect operations and long-term business viability significantly.”

Basil Taylor
Head of Allianz Risk Consulting

Leigh Ebzery, Allianz General Manager Underwritten and Distribution Workers' Compensation, says the Personal Injury landscape is also changing.

“Businesses have a legal responsibility to provide a safe workplace for their employees. But they also need to offer programs and services that prioritise mental wellbeing and facilitate a smooth return-to-work for staff who have sustained a work-related injury,” he says.

“Feedback we’re receiving from brokers suggests that SMEs are feeling the pressure to sustain their businesses. When work-related illness or injury strikes, our task is to assist SMEs as much as possible to limit the time they have operating with fewer staff.”

Leigh Ebzery
Allianz General Manager Underwritten and Distribution Workers' Compensation

Seeking expert advice from a broker or insurance partner

SMEs can reach out to their broker or insurance partner to have an open conversation about their risk exposure and what insurance options are available to them.

“It can be hard being a small business owner,” Leigh says. “Many SMEs look to brokers and their insurance partners for advice and support, and we can assist by providing advice on prioritising worker wellbeing and sharing industry-specific insights that can help. For instance, helping educate SMEs in the hospitality sector about how to minimise the threat of slips, trips and falls.”

Basil recommends that when talking to their broker or insurance partner SMEs should work through the following three steps:

1. Identifying their risks

Determining what threats they face, whether it’s cash flow issues, staff shortages, underinsurance or other.

2. Assessing their current cover

Understanding what insurances they have in place and how they can be used to manage and mitigate identified risks.

3. Strengthening their insurance policies

Identifying gaps in their insurance cover and then adding to or strengthening their suite of cover.

Leigh says Allianz can address the needs of diverse SMEs with its wide range of expertise and products – and that it can be a support to SMEs.

“We’ve got a lot of industry-specific data and valuable insights that we want to share with our SME clients,” he says.

In the current risk environment, Allianz is here to help SMEs find greater value from their spend.

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Disclaimer

This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 ("Allianz"). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way.

Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.

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