A report has been released assessing the risks that economic events such as Brexit will have on business growth.
Brexit
A report titled Future Impacts, conducted by commercial insurer RSA, found that Brexit is not perceived as a risk by 74% of businesses in the manufacturing sector. 29% stated that leaving the EU will have no impact and 45% said that it will have a positive effect.
Comparatively, 70% of SMEs across the UK held Brexit in the same regard but identified more significant threats which many companies aren’t protected against.
SMEs in the UK identified economic uncertainty as their top risk, followed by increasing market competition and cash flow. The research also showed that 59% of SMEs in the manufacturing sector aren’t insured against any of their top three risks, which brings it higher than the national average of 58%.
The report indicates underinsurance as a problem for SMEs and suggests that businesses without sufficient insurance are at risk of not being covered for the full costs of repairing the damage caused by unexpected issues.
Emerging risk are also not being properly covered as 82% of SMEs have not altered or increased their insurance covered as a result of technological change.
One of the most prominent risks for businesses is the threat of cyber-attacks, however RSA’s research shows that only 9% of businesses have cyber cover in place, and only 26% said that they are concerned about the threat posed by a cyber-attack.
The lack of protection coincides with government data, which has found that around one third of firms had formal written cyber security policies and 10% had an incident management plan in place.
Russell White, schemes and deals director, Regions and SME, Commercial Risk Solutions at RSA, said: “Our research shows that SMEs in the manufacturing sector are behind the national average when it comes to insuring against their top three risks. Though, positively, it is this sector which has the biggest plans to increase their insurance cover over the next 12 months, with nearly a fifth (19%) saying that this is the case. The onus is not only on SMEs themselves to better manage their risks, but also on brokers and insurance providers to proactively raise awareness of the protection gap and help SMEs to better understand the risks they face, and what they can do to protect themselves against them. RSA has devised a number of recommendations demonstrating what insurers, brokers, government and SMEs themselves can do to subvert this trend and help strengthen UK businesses and their contribution to our economy.”