Despite renewed focus on the workplace safety and health ("WSH") landscape in Singapore, as many as one quarter (22%) of SMEs - that are not required to provide WSH insurance for their employees - may not have any workplace safety and health insurance cover, according to QBE's annual SMEs survey.
The survey also found that only 59% of SME respondents indicated that they are fully informed of all WSH requirements, which suggests that as many as four in 10 SMEs could still be unaware of specific local WSH requirements and require further education.
Close to a third of SMEs (31%) indicated that they encountered workplace incidents in the past 12 months, indicating a strong de-emphasis of workplace safety and health issues by local SMEs.
QBE’s survey also found that this relaxed approach to WSH coverage was extended generally to business insurance.
SMEs generally underinsured
In the last 12 months, more than three-quarters of all SMEs (77%) encountered at least one business issue that could be covered by insurance, highlighting the high probability of running into issues that could cripple a business without proper risk management and mitigation.
Yet 11% of smaller SMEs (with 5-20 staff or annual revenue of less than S$1 million (US$710,000)) and 7% of large SMEs (firms with 21-200 staff or annual revenue of S$1-100 million) reported not holding any form of insurance at all - a statistic that has not changed significantly since last year’s survey. 46% of SMEs indicated that they will only consider buying insurance when they encounter unfortunate things happening to other businesses – a 5% increase over last year’s results.
An alarming 57% of respondents also indicated that many other factors come before insurance in the priorities for their business, again indicating a de-emphasis and de-prioritisation of business protection plans and policies.
The survey also found, amid others, that 45% of the Singapore SMEs said that they will not explore expansion across borders and only 14% of them indicated their intention to internationalise, with 42% of the latter being held back by concerns around sufficient funds to expand overseas and unfamiliarity with the standards and processes of foreign markets as a concern (38%). Other prominent concerns include the level of competition in other markets, regulatory and legal compliance and political instability, with the perception that the local economy is to improve in the next year.
The majority of SMEs were also found (95%) to use or invest in digital technologies. The increasing appetite among SMEs for newer technologies is contrasted by a growing concern around security considerations, with 23% of all SMEs surveyed seeing security of sensitive data as a concern, while 35% of smaller SMEs admitted to having no cyber protection at all. SMEs are therefore exhibiting a need for further education in this area and around specific business protection products currently available to them.
“The annual survey into SMEs offers us a glimpse into the overall state of Singapore’s SME business community… This year’s survey helped identify new areas in which we can partner with local firms, assisting in risk management and mitigation specific to the needs of their individual businesses. In the process, we afford them peace of mind to focus on day-to-day operations, business growth, and expansion,” said Mr Karl Hamann, Chief Executive Officer, QBE Insurance Singapore.